Japanese car giant Honda made its first annual loss in 70 years as its investments in the electric vehicle (EV) market failed to pay off. Demand for EVs has not been as strong as the company forecast, with Honda reporting a total operating loss for the year ending March 2026 of ¥423bn ($2.68bn: £1.99bn.). The firm said it was scrapping some of its EV production targets and would source parts from China, where prices are lower, to keep costs down. It cited changes in US policy as adding to its losses, including tax incentives having been taken away for US consumers purchasing EVs, and the imposition of tariffs. US consumers could previously receive up to $7,500 (£5,500) in tax credits if they purchased a new EV, but this was scrapped by President Donald Trump in September 2025. His tariffs on imported cars and auto parts in 2025 also bruised profits at several major auto manufacturers, despite a reduction in the tariffs from 25% to 15%. Honda, which was first listed on the stock market in 1957, has grown over the years to become Japan's second largest car firm. Analysts said its huge size and legacy nature make it difficult to adapt quickly to fast dips and rises in EV demand. Honda said it was now going to focus on growing its successful motorcycle business, its financial services and its hybrid vehicle manufacturing.
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