Honda’s never faced a crisis like this—and a comeback won’t be easy
Subscribe to enjoy similar stories.Honda Motor managed to stay profitable through a global financial meltdown, natural disasters, a safety crisis and the pandemic. Then came America’s electric-vehicle whiplash.The Japanese company, the fifth-largest automaker in the U.S. by sales, is confronting some of the steepest challenges it has faced in its nearly seven decades as a public company.
U.S. tariffs have squeezed profits in its biggest market. Chinese upstarts provide a new threat.
Above all, its electric vehicle ambitions in North America have collapsed.Due to $10 billion in losses from scrapping the EV plans, Honda reported on Thursday its first annual loss as a listed company, some $2.7 billion.“We have to try to stop the bleeding as soon as possible,” Chief Executive Toshihiro Mibe said.Honda is among several large, legacy automakers that have struggled navigating a topsy-turvy North American market. While renowned for its engineering expertise, it has fallen behind Chinese rivals in the automotive technology race.The company’s problems collided with a big bet on electric vehicles. The expense of developing EV technology needed to compete with Tesla and Chinese automakers required a bet-the-farm level of investment.
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