Honda Motor has reported an operating loss of 414.3 billion yen for the fiscal year ended March 2025, marking its first annual loss as a listed company in almost seven decades.
US tariffs and electric vehicle restructuring costs totalling more than 9 billion dollars pushed the second-largest automaker in Japan deep into financial loss this year.
The reported operating loss of 414.3 billion yen, equivalent to 2.63 billion dollars, contrasted sharply with a profit of 1.2 trillion yen recorded in the previous fiscal year.
The result also exceeded analyst expectations, with a poll of 22 analysts conducted by LSEG forecasting a median operating loss of only 315.6 billion yen for the period.
EV Restructuring Drives Record Losses
Honda booked total electric vehicle-related losses of 1.45 trillion yen during the fiscal year, reflecting the enormous cost of restructuring its EV operations globally.
The company also expects to incur additional EV-related costs of 500 billion yen during the current fiscal year, which began in April 2025, adding further financial pressure.
Rising material prices, partly driven by the ongoing Middle East conflict, are expected to deliver a further hit of 313 billion yen to the operating profit of Honda this year.
Motorcycle Business Provides Crucial Relief
Despite the losses, the motorcycle division of the company delivered strong results, achieving record-high sales volume and operating profit during the fiscal year ended March 2025.
Strong demand in India and Brazil drove the motorcycle segment’s record performance, helping Honda offset some of the severe financial damage caused by EV-related writedowns.
Honda stated that its motorcycle business would expand production capacity in India and aims to achieve record-high global sales of 22.8 million units going forward.
Honda Forecasts Return to Profitability
Honda still expects to return to profitability in the current fiscal year, forecasting an operating profit of 500 billion yen driven by cost-reduction measures and motorcycle revenues.
The company indicated that its profitable motorcycle division and ongoing cost-cutting programmes would be the primary drivers of its financial recovery throughout the coming year.
