Honda Motor Co. has reported its first annual loss since 1957, recording a full-year loss of $2.7 billion. This record loss follows a multibillion-dollar hit caused by a costly and ill-timed strategy to aggressively switch toward electric vehicles.
The Japanese carmaker is now walking back those plans after its China business collapsed and it gave up on EVs in the U.S. These challenges led to a significant writedown as the company scales back its electric-vehicle goals.
In response, the automaker is canceling models and shifting its focus toward hybrids and a push into India. Despite the record loss, Honda forecasts a rebound in operating profit for the current fiscal year.
The company expects to return to profitability by 2026. Based on these buoyant predictions, Honda's share price has spiked.