We’ve talked a lot about the mess Honda is in right now, thanks to its mess of a gamble on electric vehicles and subsequent pullback. Now, the Japanese automaker is posting its first annual loss since going public back in 1957 — a $2.59 billion deficit that CEO Toshihiro Mibe has to make up for. At a press conference, he said the company is going to abandon its 2040 combustion-free ambitions and pivot to producing 15 new hybrids through 2030.
During the presser, Mibe previewed two new hybrid prototypes, a silver liftback sedan that looked vaguely Honda Accord-ish and a red compact crossover that is almost certainly meant to represent the next-generation Acura RDX. Both of them will apparently go on sale within the next two years. Anything to distract, I guess. From Automotive News:
Some of the upcoming hybrids will be updates to existing nameplates, while others will be completely new. Honda will also repurpose some of its next-generation 0 Series electric vehicle architectures and components in the upcoming gasoline-electric lineup, Mibe said.
To improve margins and avoid tariffs, Honda will ramp up local procurement of hybrid drivetrain components to 64 percent in 2028 and to above 90 percent by the end of the decade. The current procurement rate in the U.S. is 16 percent, Mibe said.
Mibe’s premature bet on EVs drove Japan’s No. 2 automaker to its first losses in nearly 70 years. Honda slumped to an operating loss of ¥414.3 billion ($2.59 billion) in the full fiscal year ended March 31, erasing an operating profit of ¥1.21 trillion ($7.58 billion) the year before.
Honda also posted a net loss of ¥423.9 billion ($2.65 billion).
EV-related write-offs and impairments totaled ¥1.58 trillion ($9.9 billion) for the period, he said. Honda needed to pull the plug and change direction, despite the massive charges, Mibe said.
“We have to stop the bleeding as soon as possible and pave the way for future growth. That is the biggest responsibility I have,” he said. “We are facing a very harsh business environment.”
[…]
The company plans to halve development timelines, costs and workload through 2030. The fast-paced approach will kick in for minor model changes this fiscal year, and on full model changes from 2028. The company will also boost production efficiency by 20 percent.
Mibe said Honda will pattern the push after Chinese automakers. But he did not give specific details of how Honda would achieve these improvements, nor did he outline new plans for reining in production capacity, trimming jobs or consolidating products.
Mibe says things are looking up for the current fiscal year, which ends March 31, 2027. He projected an operating income of around $3.13 billion, and net income would recover to $1.63 billion, which is always good. There are, however, additional EV charges of $3.13 billion that carry over from the previous fiscal year that are factored into the current earnings outlook.
Ya know, it would have been really cool to see what the 0 Series, RSX and even the Afeela could have been. At the very least, they’d have been interesting, but Honda’s cold feet took that away. I’m sure its upcoming products will be solid, but I don’t exactly expect them to move the needle when it comes to innovation or sustainability, and that’s a damn shame. I guess I’ll see you all in 2041, and we can regroup then.
