Japan 's second largest carmaker Honda on Thursday confirmed its first operating loss since 1957, before it started selling mass-produced cars in the early 60s. The company has embarked on a major ove

Japan 's second largest carmaker Honda on Thursday confirmed its first operating loss since 1957, before it started selling mass-produced cars in the early 60s. The company has embarked on a major overhaul of its electic vehicle (EV) strategy, particularly in its core market in the US, after previously betting on more rapid electrification of the industry. Honda had already warned of a sizeable financial hit as a result of this shift in March, meaning that investors were largely unperturbed by T

Indeed, Honda's stock rose sharply as the company also predicted a return to profitability in 2026. The company reported an operating loss of 413.4 billion yen (roughly €2.23 billion or $2.6 billion) amid huge write-downs in its EV operations. Honda also posted a slightly larger net loss, at 423.9 billion yen. The company sold 3.4 million four-wheeled vehicles around the world in the fiscal year through March, down from 3.7 million the previous year. Honda's older and even more successful motorbike business helped pare the losses, as it sold 22.1 million motorcycles, versus 20 million in the previous fiscal year. Honda dominates several markets, including India, in the sale of new motorbikes, thanks in very large part to the budget Super Cub models that have led global sales figures ever since the 1950s. The company forecast a return to profit for the fiscal year through March 2027, and at one point early on Thursday its share price had risen by as much as 8% in response. It dipped into less pronounced positive territory as trading continued in Asia. Honda said on Thursday that a "government policy shift" under US President Donald Trump's administration, affecting sales and strategy in its largest market by far, played a large role in the losses. The US scrapped tax incentives for EV buyers as part of the so-called "Big Beautiful Bill" of September 2025. Honda investred in developing several all-electric models, like this Ridgeline pickup truck, almost entirely with a focus on the US market Image: David Zalubowski/AP Photo/picture alliance Trump's tariffs on imported cars and car parts imposed last year also worked to dent Honda's profitability, even after they were reduced from 25% to 15%. Honda also noted a "decline in competitiveness" of Honda products in China and other Asian countries, as Western manufacturers — including Germany's car giants — struggle to keep pace with rapidly improving Chinese competition.