Japan’s Honda Motor is set to book ¥1.97 trillion ($12.5 billion) in EV-strategy losses across fiscal years 2026 and 2027, equal to roughly three years of operating profit and more than a full year of total R&D spending.
In its first-quarter results for the period ended June 30, 2026 (of FY 2027) released on Wednesday, Honda said its sales revenue rose 13.5 percent year-on-year to JPY6,061.5 billion. Operating profit rose 117.4 percent to JPY530.7 billion. Profit attributable to owners of the parent rose 129.3 percent to ¥450.9 billion.
Losses in FY2026, FY2027
During the FY2026, Honda cancelled the development and market launch of electric-vehicle models planned for production in North America. As a result, Honda booked ¥1,453.6 billion in EV-related losses at the operating-profit level that year, or ¥1,577.8 billion including its share of equity-method investment losses.
For FY2027, Honda forecasts ¥520 billion in EV-related losses for the year ending March 31, 2027, all classified as strategy-change expenses. Honda raised the forecast from ¥500.0 billion to ¥520.0 billion. The ¥20 billion increase reflects a weaker yen assumption of 155 to the dollar, up from 145.
The two-year total reaches ¥1.97 trillion on an operating-profit basis, or ¥2.10 trillion including equity-method effects.
Honda forecasts sales revenue of ¥24,150 billion for FY2027. The ¥1.97 trillion loss equals 8% of that figure. The loss equals about three times the ¥650 billion forecast operating profit. It exceeds the ¥1,190 billion forecast R&D spending and the ¥1,280 billion capital-expenditure budget for the year.
Honda’s global electrified retail sales in the first quarter showed hybrids at 249,000 units, up from 225,000 a year earlier. Battery-EV sales fell to 14,000 from 18,000. Plug-in hybrids fell to 1,000. Fuel-cell vehicle sales were negligible.
Honda’s capital-expenditure forecast rose to ¥1,280 billion from ¥751 billion a year earlier, driven partly by acquiring a factory building for its U.S. battery-production joint venture with LG Energy Solution.
Honda’s adjusted operating profit, which excludes EV-related losses, is forecast to rise 12.6% to ¥1,170 billion from ¥1,039 billion.