Honda has announced the cancellation of three electric vehicles originally planned for production in North America, marking a significant retreat from its electrification roadmap and warning of losses that could reach ¥2.5 trillion ($15.7 billion).
The cancelled models include the Honda 0 Series SUV, the Honda 0 Saloon, and the Acura RSX—all of which were scheduled to be built at Honda's EV Hub in Ohio later this year on the company's in-house "Zero" EV platform.
"The current business environment where the demand for EVs is declining significantly" was cited as the primary reason for the sudden shift in strategy. Honda pointed to multiple factors affecting the US market, including the easing of fossil fuel regulations, revisions to EV incentives, and intensifying competition from Chinese EV manufacturers.
The restructuring costs represent Honda's first annual loss in nearly 70 years. For the fiscal year ending March 31, 2026, the company expects operating expenses of ¥820 billion to ¥1.12 trillion, plus equity-method investment losses of ¥110 billion to ¥150 billion.
In China, Honda acknowledged it has struggled to compete with newer EV manufacturers that leverage shorter development cycles and software-defined vehicle technologies. Chinese customers prioritize software features and regular updates—areas where Honda admits it has fallen behind.
"Honda was unable to deliver products that offer value for money better than that of newer EV manufacturers, resulting in a decline in competitiveness," the company stated.
As part of the strategic pivot, Honda will redirect resources toward next-generation hybrid vehicles while maintaining a flexible approach to future EV development. Senior executives will take voluntary pay cuts of 20–30 percent for three months.
Honda had invested over $4.4 billion to establish the Ohio EV Hub, one of the largest economic projects in the state. The company says additional restructuring expenses may occur in the coming fiscal years, with more details on its revised mid- to long-term automotive strategy expected at a press conference in May.
The move follows similar decisions by Hyundai, Kia, Volkswagen, and Ford, all of which have scrapped or delayed EV projects in response to changing US policy dynamics.