Honda Experiences Loss for the First Time Since 1957

JAKARTA - Honda has recorded its first annual loss since the company listed on the stock exchange in 1957. This condition is triggered by the large cost of restructuring the electric vehicle (EV) business that is being run by the Japanese manufacturer.

Reported by EV Arena, Saturday, May 16, in its fiscal year report ending March 2026, Honda posted an operating loss of 414.3 billion yen or around Rp. 45.9 trillion. This figure is inversely proportional to the previous period when the company still earned an operating profit of up to 1.2 trillion yen or around Rp. 133 trillion.

Honda's electric vehicle business lost 1.45 trillion yen or equivalent to Rp160.8 trillion throughout the fiscal year. Not only that, the automotive manufacturer also estimates that it will still have to spend an additional 500 billion yen or around Rp55 trillion to develop the EV business in the next fiscal year.

Despite facing great pressure, Honda remains optimistic that it can return to record profits this year. The company is targeting a profit of 500 billion yen by relying on operational cost efficiency and a strong contribution from the motorcycle business, which currently records the highest sales performance.

Honda CEO Toshihiro Mibe, revealed that the company is now canceling the target of electric vehicles as a contributor to one-fifth of new car sales by 2030. Honda also withdrew plans to fully switch to electric and fuel cell vehicles by 2040.

On the other hand, Honda has also postponed its electric vehicle project in Canada worth 9 billion euros or around Rp183 trillion without a clear deadline. The project was previously designed as a local production facility for electric vehicles and batteries in the country.

Despite being hit by business pressures, Honda's shares briefly touched a two-month high before closing up 3.8 percent on Thursday. The strengthening came after the company promised to return to shareholders at least 800 billion yen in the next three years, while maintaining an annual dividend of 70 yen per share for the new fiscal year and the previous fiscal year.

This condition also shows that Honda is still very dependent on the motorcycle business, which has been the company's main source of profit. Meanwhile, the four-wheeled automotive line is considered still lagging behind in terms of business scale and strategy execution compared to its competitors.