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“Based on our assessment that EV business viability is not currently assured, we have decided to suspend certain plans, particularly in North America,” Fujimura said during the questions portion of earnings call for the fiscal year ended March 31, 2026, on Thursday May 14.
“For areas positioned as next‑generation initiatives, we believe it is necessary to continue a certain level of preparation. At the same time, we must carefully assess when EV demand will re‑emerge.”
Honda cancelled the “launch and development” of a slew of EV models slated from production in North America back in March, resulting in a loss of 1.31 trillion yen ($8.29 billion).
Instead, the automaker will focus on generating “stable earnings from the ICE business,” president, chief executive and director of American Honda Motor Fujimura explained. Honda will focus on hybrid vehicles for the North American market as well, the company said.
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During the fiscal year ended March 31, 2026, “the automobile business faced a harsh business environment – including higher tariff burdens and lower unit sales due to factors such as semiconductor supply shortages,” the company stated.
“Tariff impacts” accounted for a profit loss of 346.9 billion yen in the fiscal year 2026, Honda said.
In the US, Honda is subject to the 50% Section 232 tariffs on steel alongside 25% tariffs on automobiles and auto parts.
The US recently subjected Honda to anti-dumping duties (ADs) on hot-rolled coil in April, according to filings with the US Federal Register. The US Department of Commerce slapped a 13.07% weighted-average dumping margin on the company.
Honda’s vehicle sales fell by 8.9% during the fiscal year ending March 31, 2026 to 3,387,000 vehicles. Sales in Asia, excluding Japan, declined from 1,182,000 to just 929,000, according to Honda. Sales in North America slipped 49,000 to 1,605,000 vehicles.
Still, sales revenue was mostly steady year on year at 21.8 trillion yen ($137.4 billion), up by just 0.5% from the prior year. Sales revenue from the automobile business totaled 14.2 trillion yen, down from 14.5 trillion yen during the fiscal year ended March 31, 2025.
Honda expects automobile unit sales to rise by 3,000 automobiles in the fiscal year ending March 31, 2027, according to the company’s financial forecast. The automaker anticipates North American sales to grow by 100,000 units, but a decrease of unit sales in Asia, excluding Japan, or 114,000 units will offset the growth.
“From the perspective of tariff measures, we continue to believe that local production remains a meaningful initiative,” president, director and representative executive officer Toshihiro Mibe said.
Honda confirmed the pause on plans to establish a comprehensive value chain in Canada, citing the ongoing US-Mexico-Canada (USMCA) trade agreement discussions.
“Regarding Canada, the project is currently frozen for two years, but discussions with relevant stakeholders, including the Canadian government, are ongoing,” Mibe explained. “Considering our recent strategic reassessment, we intend to determine the future direction while also considering developments such as the USMCA.”
All three members of the USMCA treaty formally launched the renegotiation process earlier in the year. Steel market participants said the treaty will likely bifurcate and result in multiple treaties amongst the countries.
Some market participants are beginning to acknowledge that the free trade environment that previously existed under the current USMCA trade agreement will no longer exist following the renegotiation.
“Free trade — forget it; there will be tariffs,” Oscar del Cueto, president of American Chamber of Commerce Mexico (AmCham Mexico) and Canadian Pacific Kansas City Mexico, said during a Council of the Americas Conference on May 5.
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