Honda reports more than 60% drop in third-quarter operating profit

[TOKYO] Honda Motor reported a 61 per cent drop in third-quarter profit on Tuesday (Feb 10), hit by US tariffs and restructuring costs for its electric vehicle business, becoming the latest automaker to rack up EV losses as demand for technology cools.

Honda’s grim results come in the wake of deeper warnings from global automakers Ford and Stellantis, both of which have recently flagged massive writedowns related to their EV businesses.

Demand for the technology has cooled in markets such as the US, where customers are increasingly turning to petrol-electric hybrid models championed by Toyota.

While Honda has hardly been an EV powerhouse, it said its automobile business slipped to a loss over the nine months that ended in December, due to one-off costs related to its EV business, including asset writedowns, alongside the tariff impact.

Japan’s second-biggest automaker reported operating profit of 153.4 billion yen (S$1.2 billion) for October-to-December quarter, down 61.4 per cent year on year and missing the 174.5 billion yen average forecast from nine analysts polled by LSEG.

Honda needed to boost the competitiveness of its business through a fundamental restructuring of its strategy, as it faces intensifying global competition, including from the rise of new car manufacturers, Executive vice-president Noriya Kaihara said in an earnings briefing.

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In China, so-called new energy vehicles accounted for more than half of the market last year, a category that includes some hybrids along with EVs. In that market, Honda is lagging behind local players both in terms of pricing and software, Kaihara said.

By contrast, Honda said its motorcycle business continued to perform strongly, with global sales led by India and Brazil, helping offset weakness in its automobile operations.

The company maintained its operating profit forecast for the year ending March 2026 at 550 billion yen. REUTERS