Three vehicles scrapped months before production as Honda faces first annual loss in nearly 70 years
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Honda 0 SUV Prototype Debuts with American-Made Momentum ...
Honda 0 Series｜Honda Motor Co.,Ltd.
Honda 0 Saloon, 0 SUV Prototypes Arrive at CES - MotorWeek
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"They spent four billion dollars building the future, then let politicians and cheap competitors talk them back into yesterday — child, that ain't a pivot, that's a retreat dressed up in Sunday clothes."
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"Fifty-five billion dollars in write-downs, and the lesson is the oldest one in industry: a man who abandons a proven technology before a better one is truly ready deserves neither the old nor the new."
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Japan's fourth-largest automaker by revenue, with major US manufacturing operations in Ohio and a 25-year history of hybrid vehicle production.
A 50/50 joint venture between Sony Group and Honda formed in 2022 to develop the Afeela line of premium electric vehicles.
Sony Honda Mobility of America celebrated the grand opening of its AFEELA Studio & Delivery Hub in Fremont, California, signaling continued commitment to Afeela 1 deliveries later in 2026 despite Honda's cancellation of the 0 Series platform.
Honda announced it will halt production of the Prologue, the GM-designed EV it had been selling since 2023, as part of its broader EV pullback. The move marks the end of Honda's partnership with General Motors on the vehicle.
Honda and LG Energy Solution's $3.5 billion Ohio battery plant will continue manufacturing batteries, but for applications other than the canceled 0 Series EVs, addressing questions about stranded capacity.
Honda scrapped the Honda 0 SUV, Honda 0 Saloon, and Acura RSX — all three EVs planned for its Ohio EV Hub — and slashed EV R&D spending by 30%. The company expects its first annual loss since 1957, with combined current and future restructuring charges potentially reaching 2.5 trillion yen ($15.8 billion). Honda said it will redirect resources to next-generation hybrid vehicles.
CEO Toshihiro Mibe and Executive Vice President Noriya Kaihara voluntarily forfeited 30% of their compensation for three months; other executives took 20% cuts in response to the EV strategy reversal and projected losses.
Sony Honda Mobility started trial production of the $89,900 Afeela 1 luxury sedan at Honda's East Liberty plant, with customer deliveries planned for California later in 2026.
Honda acquired LG Energy Solution's facility assets in the Ohio battery plant through a sale-and-leaseback structure, taking full ownership of the building months before canceling the EVs it was designed to supply.
The National Highway Traffic Safety Administration reset fuel economy requirements to model year 2022 levels, with minimal annual increases — removing a key regulatory driver of automaker EV investment.
After a record 12% market share in September as buyers rushed to claim credits, battery-electric vehicle sales fell below 6% in every remaining month of 2025. The full-year US EV market declined for the first time since 2019.
The 'One Big Beautiful Bill Act' eliminated the $7,500 new EV tax credit effective September 30, 2025, and the $4,000 used EV credit at the end of 2025 — years ahead of the original 2032 expiration under the Inflation Reduction Act.
Acura revealed the RSX nameplate would return as an electric SUV coupe — the first vehicle built on Honda's in-house Zero platform with ASIMO OS — with production planned for late 2026.
A proposed merger that would have created the world's third-largest automaker fell apart over governance disputes. Honda wanted Nissan as a subsidiary; Nissan rejected the structure.
Honda showcased near-production prototypes of both 0 Series vehicles and announced ASIMO OS, its proprietary vehicle operating system. North American production was confirmed for 2026.
At a business briefing, Honda committed 10 trillion yen in electrification R&D through the decade and set a target of producing more than 2 million EVs annually by 2030.
Honda world-premiered the '0 Series' with Saloon and Space-Hub concepts, built on a proprietary platform with a 'Thin, Light, and Wise' design philosophy. Seven models were planned globally by 2030.
The two companies scrapped plans to co-develop millions of sub-$30,000 EVs, citing changing market conditions. Honda decided to develop its own EV platform instead.
Honda committed $700 million to retool three existing Ohio plants for EV production and partnered with LG Energy Solution on a $3.5 billion battery manufacturing joint venture in Fayette County, Ohio.
New CEO Toshihiro Mibe announced Honda would sell only electric and fuel-cell vehicles globally by 2040, with 40% of sales zero-emission by 2030.
Discussed by: Bloomberg, S&P Global Mobility, and Cox Automotive analysts who note Honda's strong hybrid DNA and rising global hybrid demand
Honda's fourth-generation hybrid system (e:HEV) already powers its three best-selling US models, and hybrids accounted for over 25% of Honda brand sales in 2024. If the company hits its target of 2.2 million hybrid sales annually by 2030 — roughly double current levels — the higher margins on hybrids compared to money-losing EVs could return Honda to profitability within two fiscal years. Toyota's battery supply deal would lower costs further. This is the base case most analysts expect, given Honda's proven hybrid manufacturing scale and consumer demand for fuel-efficient vehicles that don't require charging infrastructure.
Discussed by: Automotive News, Nikkei Asia, and Honda's own statements about continuing EV development on a longer timeline
Honda maintained that it will bring EVs to market 'when demand justifies it' and continues investing in battery technology through its Ohio plant. If solid-state batteries mature, charging infrastructure expands, or a future administration reinstates EV incentives, Honda could launch a streamlined EV lineup built on lessons from the 0 Series development. The revised strategy announcement expected in May 2026 may outline this path. However, re-entry would face a market where Chinese, Korean, and Tesla competitors have years of additional manufacturing experience and cost optimization.
Discussed by: The Autopian, The Drive, and Honda dealer leadership who have publicly called the Sony venture a 'costly distraction'
The Afeela 1 shares platform DNA with the canceled 0 Series vehicles and depends on Honda's Ohio manufacturing facilities. With Honda pulling back from EV production, the cost of maintaining EV-capable production lines for a single low-volume luxury vehicle ($89,900+) could become prohibitive. Sony has already signaled uncertainty, stating it has 'no information' on the project's fate. If the joint venture dissolves, it would mark the second high-profile Honda EV partnership failure after the GM Ultium co-development deal collapsed in 2023.
Discussed by: Analysts at Pelham Smithers Associates and industry observers tracking BYD's global expansion and GM's $35,000 Bolt
If competitors like GM (Chevrolet Bolt at $35,000), Hyundai, and eventually Chinese manufacturers manage to deliver affordable, profitable EVs in the US market by 2027-2028, Honda's absence from the segment could erode its position among younger and cost-conscious buyers. The risk increases if a future policy shift reinstates EV incentives or California's zero-emission mandate survives legal challenges. Honda would face the choice of re-entering a market where rivals have years of head start — a pattern that proved costly for late movers in hybrid technology a decade earlier.
In 1996, General Motors began leasing the EV1 — the first purpose-built, mass-produced electric vehicle from a major American automaker — in response to California's 1990 Zero Emission Vehicle mandate. GM produced about 1,100 units. In 2001, California's Air Resources Board weakened the mandate under pressure from automakers and oil industry groups. GM terminated the EV1 program in 2003, recalled every leased vehicle, and crushed them in the Arizona desert despite customer protests.
The cancellation sparked public outrage and inspired the 2006 documentary 'Who Killed the Electric Car?' GM CEO Rick Wagoner later called killing the EV1 his 'worst decision.'
The decade-long gap left the mass EV market to Tesla, which launched the Roadster in 2008. When GM finally returned with the Chevrolet Bolt in 2017, it had ceded the EV leadership position it once held.
The EV1 story is the closest historical precedent for Honda's situation: a major automaker investing in electric vehicles, then abandoning them after the regulatory incentives that justified the investment were weakened or removed. The key question is whether Honda's retreat, like GM's, will prove to be a costly delay rather than a wise pivot.
In September 2015, the Environmental Protection Agency (EPA) revealed that Volkswagen had installed software in 11 million diesel vehicles worldwide to cheat emissions tests. VW had built its entire global strategy around 'clean diesel' technology as an alternative to hybrids and EVs. The scandal destroyed that strategy overnight. VW's then-CEO Martin Winterkorn resigned within a week.
VW paid more than $30 billion in fines, buybacks, and settlements — the largest corporate scandal payout in automotive history. The company's stock lost a third of its value in days.
Forced to abandon diesel, VW launched a massive pivot to electric vehicles, committing over $100 billion to its ID. series and battery factories. By 2025, however, VW was itself scaling back EV production and cutting 50,000 jobs as EV demand underperformed projections.
Dieselgate illustrates how a technology strategy can be destroyed by regulatory shifts, forcing multi-billion-dollar pivots. VW's experience — pivoting from diesel to EVs, then scaling back EVs — shows that the 'right' powertrain strategy is a moving target, and automakers that bet heavily on any single technology risk enormous write-downs when conditions change.
The 2008 financial crisis pushed General Motors and Chrysler into bankruptcy, requiring $80 billion in US government bailouts. Ford avoided bankruptcy only by mortgaging nearly all its assets, including the Ford logo, in 2006. Combined losses across the Big Three exceeded $100 billion. Hundreds of thousands of auto workers lost their jobs, and dozens of plants were shuttered across the Midwest.
GM and Chrysler emerged from government-managed bankruptcies within months, shedding brands (Pontiac, Saturn, Hummer, Plymouth), closing plants, and renegotiating labor contracts.
All three companies returned to profitability by 2011-2012. The restructuring made them leaner and more competitive, and the US auto industry went on to post record profits in the mid-2010s.
The 2008-2009 crisis is the only precedent for the scale of write-downs now hitting the auto industry over EVs. Honda's potential $15.8 billion loss is comparable to what individual automakers absorbed during the financial crisis. The parallel suggests that massive restructuring charges, while painful, do not necessarily signal permanent decline — but recovery requires fundamental strategic change, not just cost-cutting.