Honda (HMC) Stock Tanks After Scrapping U.S. EV Plans Entirely

TLDR

• Honda announced a write-down of up to $15.7 billion (2.5 trillion yen) tied to its EV strategy overhaul
• It will post its first annual loss since listing in 1957, swinging from a 550 billion yen profit forecast to a 570 billion yen loss
• Honda cancelled three EV models planned for U.S. production, rather than just scaling them back
• U.S.-listed Honda (HMC) stock fell around 8% in premarket trading after the news
• The auto industry has now booked over $67 billion in EV-related write-downs combined across Honda, Ford, GM, and Stellantis

Honda Motor has announced one of the biggest single write-downs in auto industry history, flagging up to $15.7 billion in charges tied to a sweeping reset of its EV strategy.

Honda Motor Co., Ltd., HMC

The Japanese automaker said it now expects to lose as much as 570 billion yen ($3.6 billion) for the fiscal year ending March 2026. That flips a previous profit forecast of 550 billion yen and marks Honda’s first annual loss since it went public in 1957.

U.S.-listed Honda stock dropped roughly 8% in premarket trading on Thursday following the announcement.

Honda is cancelling three EV models that had been planned for U.S. production. Analysts had expected further EV-related losses, but the outright cancellation caught some off guard. Julie Boote, autos analyst at Pelham Smithers Associates, called the scale of the write-down “a surprise,” noting Honda had an “ambitious EV expansion plan, which was badly affected by the changing market environment.”

CEO Toshihiro Mibe said EV demand had fallen sharply, making profitability “very difficult” to sustain in that segment. He and Executive Vice President Noriya Kaihara will each voluntarily give up 30% of their compensation for three months as a result.

Industry-Wide EV Pain

Honda’s charge pushes the auto industry’s combined EV write-down total to around $67 billion. Ford has booked $19 billion in EV-related charges, Stellantis $25 billion, and GM $7.6 billion — with GM warning more could follow.

The combined market cap of GM, Ford, Stellantis, and Honda sits at roughly $180 billion, putting the scale of these losses in stark context.

The write-downs trace back to overconfidence in EV demand. Tesla’s rapid growth between 2020 and 2023 — with deliveries more than tripling — led rivals to assume the market would keep expanding at pace. Rivian’s November 2021 IPO, which briefly valued the startup at nearly $160 billion, added fuel to projections that Americans would buy 3 million EVs in 2025.

The actual number: 1.3 million — flat with 2024, and roughly 8% of total U.S. new car sales.

Policy Shifts Hit Hard

The Trump administration’s rollback of EV incentives has sharpened the pressure. The $7,500 EV purchase tax credit was eliminated in September, and analysts warn U.S. EV sales could fall 50% in 2026 as a result.

Honda also flagged write-downs on its China operations, where it has struggled to keep pace with software-focused rivals like BYD.

The company says it will focus on strengthening its model lineup in India, a market where Chinese automakers are largely shut out — similar to the U.S.

Honda plans to release a revamped mid-to-long-term business strategy in the next fiscal year. As of Thursday’s premarket, HMC stock was trading down around 8%.

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