Honda (NYSE: HMC) projects FY26 loss after major EV strategy reset
Rhea-AI Filing Summary
Honda Motor Co., Ltd. sharply revised its forecast for the fiscal year ending March 31, 2026, after cancelling development and market launches of certain North American electric vehicle models and reassessing its automobile electrification strategy. Sales revenue guidance remains 21,100,000 million yen, but operating profit is now projected to swing from a previously expected 550,000 million yen profit to a loss between 570,000 million yen and 270,000 million yen. Profit for the year attributable to owners of the parent is now forecast between a loss of 690,000 million yen and 420,000 million yen, compared with an earlier forecast of a 300,000 million yen profit. Honda expects total expenses and losses related to this strategic reassessment, including current and future periods, to be up to 2,500.0 billion yen and anticipates extraordinary losses of 340.0 billion yen to 570.0 billion yen in non-consolidated results. Despite this, the company is maintaining its dividend forecast and executives will voluntarily forfeit portions of compensation and short-term incentives. Separately, Honda and Sony are reviewing the business direction of their joint venture Sony Honda Mobility Inc., which has discontinued development and launch of its first and second AFEELA models, though the impact on Honda’s revised full-year forecast is expected to be immaterial.
Positive
- None.
Negative
Major earnings downgrade and swing to loss: FY2026 operating profit guidance moves from a 550,000 million yen profit to a 570,000–270,000 million yen loss, with profit attributable to owners shifting from a 300,000 million yen profit to a 690,000–420,000 million yen loss.
Large electrification-related charges: Honda expects operating costs and expenses of 820,000–1,120,000 million yen plus 110,000–150,000 million yen of equity-method losses tied to its EV strategy reassessment, and total related expenses and losses of up to 2,500.0 billion yen.
Insights
Honda now guides to a large FY26 loss as EV plans are scaled back.
Honda cancelled planned North American EV models and reassessed its electrification strategy, triggering sizeable impairments and related costs. Operating profit guidance shifts from a 550,000 million yen profit to a 570,000–270,000 million yen loss, a major reversal versus prior expectations.
The company expects 820,000–1,120,000 million yen of operating costs and expenses from this reassessment, plus 110,000–150,000 million yen of equity-method losses, and total related expenses and losses of up to 2,500.0 billion yen over time. FY26 profit attributable to owners is now forecast as a 690,000–420,000 million yen loss.
Despite this pressure, Honda keeps its dividend forecast and highlights support from Motorcycle and Financial services businesses. Representative executive officers will voluntarily forfeit about 25%–30% of annual compensation, and certain executives will give up portions of monthly pay and short-term incentives for periods ending by March 31, 2027.
No.1-7628
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF MARCH 2026
COMMISSION FILE NUMBER: 1-07628
HONDA GIKEN KOGYO KABUSHIKI KAISHA
(Name of registrant)
HONDA MOTOR CO., LTD.
(Translation of registrant’s name into English)
2-3, Toranomon 2-chome, Minato-ku, Tokyo 105-8404, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F * Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Contents
Exhibit 1:
Joint statement from Sony Group Corporation and Honda Motor Co., Ltd. regarding the review of Sony Honda Mobility’s business direction
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HONDA GIKEN KOGYO KABUSHIKI KAISHA (HONDA MOTOR CO., LTD. ) |
| /s/ Koji Ito |
| Koji Ito |
| General Manager |
| Finance Division |
| Honda Motor Co., Ltd. |
Date: March 25, 2026
[Translation]
March 25, 2026
To Whom It May Concern:
| Company Name: | Honda Motor Co., Ltd | |
| Representative: | Toshihiro Mibe | |
| Director, President and Representative Executive Officer | ||
| (Securities Code: 7267 Prime Market, TSE) | ||
| Contact Person: | Masao Kawaguchi | |
| Head of Accounting and Finance Unit | ||
| (TEL: +81-3-3423-1111) |
The review of Sony Honda Mobility’s business direction
Honda Motor Co., Ltd. (the “Company”) announced today, as set forth in the attached release, a review of the business direction of Sony Honda Mobility Inc., an equity-method affiliate of the Company.
With respect to this matter, the impact on the amount of the revision to the full-year consolidated financial forecasts for the fiscal year ending March 31, 2026, as disclosed in the “Notice Concerning Recording of Losses Associated with the Reassessment of Automobile Electrification Strategy and Revision on Forecast for Consolidated Financial Results for the Fiscal Year Ending March 31, 2026” dated March 12, 2026, is expected to be immaterial.
For details of the revision to the full-year consolidated financial forecasts disclosed on March 12, 2026, please see the attached timely disclosure.
- End -
March 25, 2026
Sony Group Corporation
Honda Motor Co., Ltd.
Joint statement from Sony Group Corporation and Honda Motor Co., Ltd. regarding the review of Sony Honda Mobility’s business direction
Since its establishment in September 2022, Sony Honda Mobility Inc. (“SHM”), the joint venture (JV) formed by Sony Group Corporation (“Sony”) and Honda Motor Co., Ltd. (“Honda”) has aimed to develop and sell high value-added mobility products and to provide mobility-related services by combining the technologies, expertise, and development capabilities of Sony and Honda.
However, as a result of Honda’s reassessment of its automobile electrification strategy announced on March 12, 2026 factoring the changes to the EV market, the underlying assumptions of SHM’s business operations such as the utilization of certain technologies and assets planned to be provided by Honda were fundamentally altered, resulting in the announcement by SHM today to discontinue the development and launch of its first model, AFEELA1, and its second model. At the same time, Sony, Honda and SHM have determined to review of SHM’s business direction.
Sony, Honda and SHM will continue to discuss and evaluate the future of SHM, taking into account the initial purpose of the JV establishment as well as the latest EV market environment, and intend to jointly announce SHM’s future direction, mid to long-term positioning as well as contributions to the future of mobility at the earliest possible opportunity.
[Translation]
March 12, 2026
To Whom It May Concern:
| Company Name: | Honda Motor Co., Ltd | |
| Representative: | Toshihiro Mibe | |
| Director, President and Representative Executive Officer | ||
| (Securities Code: 7267 Prime Market, TSE) | ||
| Contact Person: | Masao Kawaguchi | |
| Head of Accounting and Finance Unit | ||
| (TEL: +81-3-3423-1111) |
Notice Concerning Recording of Losses Associated with the Reassessment of Automobile Electrification Strategy and Revision on Forecast for Consolidated Financial Results for the Fiscal Year Ending March 31, 2026
The Board of Directors of Honda Motor Co., Ltd. (the “Company” and, together with its subsidiaries and affiliates, “Honda”), at its meeting held on March 12, 2026, resolved to cancel the market launches and development of certain electric vehicle (EV) models that had been planned for production in North America. As a result of its reassessment of its automobile electrification strategy including this decision, the Company now expects to record losses in its consolidated financial results for the fiscal year ending March 31, 2026. Accordingly, the Company has revised its forecasts for consolidated financial results for the fiscal year ending March 31, 2026, which was announced on February 10, 2026, as outlined below.
Particulars
| 1. | Recording of losses associated with the reassessment of automobile electrification strategy |
| (1) | Business environment surrounding Honda |
Setting a goal to realize carbon neutrality for all products and corporate activities Honda is involved in by 2050, Honda has been working to reduce its environmental impact. To realize carbon neutrality for small-size mobility products, including passenger cars, Honda believed EVs would be the optimal solution from a long-term perspective. Based on this belief, Honda shifted its strategic direction toward the popularization of EVs. Supported by its internal combustion engine (ICE) and hybrid electric vehicle (HEV) business with accumulated technologies and know-how, as well as a stable profit base provided by Motorcycle business and Financial services business with a solid customer base, Honda has been promoting EV adoption. However, the profitability of Honda’s Automobile business is declining primarily due to the impact on the ICE and HEV business caused by the United States government policy shift including the imposition of import tariffs, and a decline in the competitiveness of Honda products in Asia due to the impact of the allocation of more resources to EV development.
In addition, the business environment surrounding Honda is changing dramatically day by day, and the outlook remains uncertain. The United States government policy shifts including the abolition of tax incentives for EV purchases, as well as the easing of fossil fuel regulations have slowed down the EV market. In China and other Asian countries, what customers value more in automobiles is shifting from hardware features such as fuel efficiency and cabin space to software-based features that continuously advance in line with customer preferences. This has intensified competition due to the rapid emergence of newer EV manufacturers that leverage their shorter product development cycle and strengths in the area of software-defined vehicle (SDV) technologies, including advanced driver assistance systems (ADAS).
| (2) | Losses expected to be recorded |
As part of its strategic reassessment in response to the slowdown of the EV market in North America, the Company has decided to cancel the market launches and development of certain EV models that were previously planned for production in North America. As a result of reassessment of automobile electrification strategy including this decision, the Company now expects to record losses including impairment and write-off losses on tangible and intangible assets that were intended to be used for the production of EV models whose market launches and development have been canceled, as well as losses related to additional costs due to the cancellation of development and sales. In addition, due to a reassessment of recoverability prompted by intensified competition in China, the Company now expects to record impairment losses on certain investments accounted for using the equity method in China.
As a result, the Company expects to record the following losses in the consolidated financial statements for the fiscal year ending March 31, 2026:
| 1) | Operating costs and expenses between 820.0 billion yen and 1,120.0 billion yen, |
| 2) | Share of loss of investments accounted for using the equity method between 110.0 billion yen and 150.0 billion yen. |
Moreover, the Company expects to record extraordinary losses between 340.0 billion yen and 570.0 billion yen in the non-consolidated financial statements. These amounts are preliminary estimates as of March 12, 2026, and will be finalized in the consolidated and non-consolidated financial statements for the fiscal year ending March 31, 2026. Furthermore, additional expenses or losses may be incurred in connection with the above-mentioned reassessment of automobile electrification strategy in future periods. The Company expects the total of expenses and losses related to the reassessment of automobile electrification strategy, including the expected losses for the fiscal year ending March 31, 2026, will be up to 2,500.0 billion yen. These amounts are preliminary estimates based on information currently available and certain assumptions. The actual results may differ from those described in these forward-looking statements as they involve potential risks and uncertainties.
| (3) | Future direction for Honda’s Automobile business |
In order to respond flexibly to the rapid changes in the current business environment, Honda is making progress in the reorganization of its strategic framework and reestablishment of its competitive strengths.
Honda will aim to strengthen its HEV models through the reassessment of resource allocations by streamlining the lineup of EV models in light of the recent slowdown of the EV market in North America. In addition to its main markets, namely Japan and the United States, Honda will seek to enhance the model lineup and cost competitiveness in India, where market expansion is expected. In Asisa, Honda will seek to enhance competitiveness by the market launches of next-generation HEV models as well as reassessment of resource allocation. In order to strengthen its Automobile business structure, Honda will establish a fixed-cost structure appropriate for the scale. Honda will promote electrification flexibly from a long-term perspective, while balancing profitability and demand trends.
Although there is a possibility that additional expenses and/or losses will be recorded in future periods, Honda aims to introduce next-generation HEV models and enhance HEV model lineups to improve profitability of Automobile business and maintain stable returns to shareholders based on Motorcycle business and Financial services business’ solid earning power and cash generating capability. Honda is planning to announce the details of the reestablishment of its mid- to long-term business strategy at an appropriate time in the next fiscal year.
| 2. | Revisions on forecasts for the consolidated financial results for the fiscal year ending March 31, 2026 |
| (1) | Revision of forecasts for consolidated financial results for the fiscal year ending March 31, 2026 |
| Sales revenue (Million Yen) |
Operating profit (Million Yen) |
Profit before income taxes (Million Yen) |
Profit for the year (Million Yen) |
Profit for the year attributable to owners of the parent (Million Yen) |
Basic earnings per share attributable to owners of the parent (Yen) |
|||||||||||||||||||
| Forecast previously announced (A) |
21,100,000 | 550,000 | 620,000 | 360,000 | 300,000 | 75.05 | ||||||||||||||||||
| Forecast revision as of March 31, 2026 (B) |
21,100,000 | |
-570,000 ~ -270,000 |
|
|
-650,000 ~ -310,000 |
|
|
-630,000 ~ -360,000 |
|
|
-690,000 ~ -420,000 |
|
|
-172.62 ~ -105.07 |
| ||||||||
| Change (B-A) |
0 | |
-1,120,000 ~ -820,000 |
|
|
-1,270,000 ~ -930,000 |
|
|
-990,000 ~ -720,000 |
|
|
-990,000 ~ -720,000 |
|
|||||||||||
| Percentage change (%) |
0.0 | — | — | — | — | — | ||||||||||||||||||
| (Reference) Results of the fiscal year ended March 31, 2025 |
21,688,767 | 1,213,486 | 1,317,640 | 903,034 | 835,837 | 178.93 | ||||||||||||||||||
The revised forecasts are estimated by the management of the Company based on information currently available to Honda. These forecasts are disclosed with a range as they involve potential risks and uncertainties.
| (2) | Reason for revision for consolidated financial results for the fiscal year ending March 31, 2026 which was announced on of February 10, 2026 |
The Company made the decision to cancel the market launch and development of certain EV models that had been planned for production in North America. In conjunction with this decision, Honda has reassessed its automobile electrification strategy and expects to record an operating costs and expenses of 820.0 billion yen to 1,120.0 billion yen, as well as share of loss of investments accounted for using the equity method of 110.0 billion yen to 150.0 billion yen. As a result, the Company has revised its forecasts for consolidated financial results for the fiscal year ending March 31, 2026, which was announced on February 10, 2026, as indicated above.
The Company adopts DOE (dividend on adjusted equity attributable to owners of the parent) as its shareholder redistribution indicator. Although the Company revised February 10, 2026 forecasts for consolidated financial results for the fiscal year ending March 31, 2026, the Company has not changed the dividend forecast.
| * | Basic earnings per share attributable to owners of the parent is calculated based on profit for the year attributable to owners of the parent. |
| * | The forecast for consolidated financial results of the Company is based on the management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that the actual results of the Company could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in the principal markets of the Company, its consolidated subsidiaries and its affiliates accounted for using the equity method, and the fluctuation of foreign exchange rates, as well as other factors detailed from time to time. |
| * | Along with the above information, please refer to Honda’s investor relations website (URL https://global.honda/en/investors/). |
| 3. | Voluntary Forfeiture and Reduction of Executive Compensation |
In light of the revised forecast of financial results for the fiscal year ending March 31, 2026 and the losses associated with the reassessment of automobile electrification strategy, certain executive officers will voluntarily forfeiture a portion of their compensation as below for the fiscal year ending March 31, 2027.
The President and Representative Executive Officer, and the Executive Vice President and Representative Executive Officer:
A voluntary forfeit equivalent to 30% of monthly compensation (for three months)
Members of the Executive Council and Managing Executive Officers related to the Automobile Business*:
A voluntary forfeit equivalent to 20% of monthly compensation (for three months)
| * | Those who have held the relevant positions during the fiscal year ending March 31, 2026, excluding directors and/or officers who will retire as of the end of March 2026. |
In addition, it has been decided that the President and Representative Executive Officer, and the Executive Vice President and Representative Executive Officer will forfeit their short-term performance-linked compensation (STI) for the fiscal year ending March 31, 2026.
As a result, the annual compensation of the Representative Executive Officers will be reduced by approximately 25% to 30% from the standard level.
FAQ
What prompted Honda (HMC) to revise its FY 2026 financial forecast?
How did Honda’s (HMC) FY 2026 profit outlook change in this update?
What total losses does Honda (HMC) expect from its EV strategy reassessment?
Will Honda (HMC) change its dividend after the FY 2026 forecast revision?
How are Honda (HMC) executives responding to the losses from the EV strategy shift?
What is happening with Sony Honda Mobility and the AFEELA EV models?
