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Honda strategic realignment and EV financial losses

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2026-09-06 15:19 UTC → 2026-09-08 06:16 UTC · added ~~removed~~

Honda Motor Co. is undergoing a significant strategic realignment following massive financial losses tied to its electric vehicle (EV) transition. The company projected total losses of approximately $13 billion for the fiscal years ending March 2026 and March 2027, a figure representing roughly three years of its operating profit. In response to these losses, which included $4.1 billion in asset-impairment charges and $3.4 billion related to the cancellation of North American EV models, Honda is shifting its global priority from EV market volume to overall profitability. This new strategy involves scaling back EV offerings in Europe—where the Super N micro-car will be the primary electric model, initially limited to the United Kingdom—and focusing on hybrid technology and specialized models to compete with mass-market manufacturers, particularly Chinese competitors like BYD. To mitigate costs, Honda is pursuing technical collaborations with Nissan. These discussions include the joint development of hardware and software for software-defined vehicles (SDV), including a standardized electronic control unit targeted for fiscal year 2029, as well as potential cooperation regarding batteries and manufacturing capacity. While a formal merger is not planned, the company aims to introduce 15 global models by 2030. To further bolster its financial position, Honda has launched a major cost-reduction initiative aiming to save 1.5 trillion yen (approximately ~~$9.4~~ $9 billion to $10 billion) by 2030. ~~This includes~~ To achieve these goals, the company is pressuring suppliers for up to 30% cost reductions in pressed and forged components, electrical parts, and SDV equipment, while increasing the use of standardized parts and procurement from Chinese suppliers. This overhaul is specifically designed to counter the cost advantages and proprietary battery technologies utilized by Chinese manufacturers to gain market share in Europe, Latin America, and Southeast Asia.

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