Honda Scraps Plans for 3 U.S. EVs as it Warns of Potential $16 Billion Loss

Honda scrapped plans to bring three EVs to the U.S. market, joining a growing list of manufacturers shifting plans following the phase-out of federal tax credits last September. Honda executives also warned the company could post losses of up to $16 billion due to factors that also include the cost of U.S. tariffs. More from Headlight.News.

This was supposed to be a big year for Honda’s EV program, the automaker beginning the roll-out of its new 0 Series line-up, among other moves. But the third-largest Japanese automaker on Thursday revealed it has pulled plans to bring two models from that new battery-electric family to the U.S. market, while also scrapping the U.S. version of the all-electric Acura RSX.

Honda joins a growing list of automakers – including Ford, Stellantis, Hyundai and Volkswagen – who are pulling back on commitments to the U.S. EV market as sales plunge following the phase-out of federal tax credits.

Those moves, along with other headwinds including the Trump administration’s import auto tax credits, will take a heavy toll on Honda’s bottom line, CEO Toshihiro Mibe warning his company expects to book losses for the fiscal year ranging anywhere from $5.2 billion to $15.8 billion.

“Stop the bleeding”

Describing the decision to scrap the three U.S. EVs as an “agonizing decision,” Mibe said, “Our first priority is to stop the bleeding, Then, rebuilding Honda’s future business competitiveness and delivering results is our paramount responsibility.”

As recently as last November, Mibe said Honda was preparing to launch production of the 0 Series Saloon and SUV models, as well as the Acura RSX, at the new EV Hub the automaker had set up in mid-Ohio after spending billions to update several of its oldest U.S. assembly plants.

But in a statement issued Thursday morning, the company said, “Honda determined that starting production and sales of these three models in the current business environment where the demand for EVs is declining significantly would likely result in further losses over the long term.

Missing the mark

It’s clear that Honda has been worried about declining EV sales in the U.S. market. Cox Automotive reported that registrations of all-electric vehicles fell last year for the first time since 2019, coming in just short of 8% of the overall American new vehicle market. The numbers have remained in the doldrums since the tax credits were phased out and, according to forecasts by Cox and other research firms, demand isn’t expected to stabilize until late this year. AutoPacific, Inc., for one anticipates EVs will reach only about 15% of the market by 2030, barely half the share it forecast before the 2024 presidential election.

Honda, in particular, has fared poorer than many of its competitors. In September, the company scrapped its first long-range luxury model, the Acura ZDX. Though it continued offering the Honda Prologue, the more mainstream model suffered an 86% year-over-year decline in demand during the final quarter of 2025, to just 2,641 vehicles.

Honda will now write off billions due to the downsizing of its EV program, along with operating losses for the fiscal year ending on March 31 ranging from ¥820 billion to ¥1.12 trillion — $5.2 billion to $7.1 billion. All told, the losses could reach ¥2.5 trillion, or $15.8 billion at current exchange rates.

Thursday’s announcement came as a stunning about-face, some analysts said, noting that the Japanese automaker was indicating it would still deliver an operating profit for the year.

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0 Series

Honda has long been a proponent of electrification, actually beating rival Toyota by introducing its first hybrid, the original Insight model, into the U.S. market months ahead of the bigger manufacturer’s more successful Prius.

It briefly marketed a low-range EV in the 1990s but took an unusual approach to getting into the long-range segment earlier this decade, jointly developing and producing the Prologue and ZDX in partnership with General Motors. The two companies last year scrapped a planned second EV alliance that was to focus on low-cost models.

Instead, Honda opted to go with more upscale products relying on an all-new platform developed in-house. Using what has become a common approach in the industry, Honda came up with a skateboard-like platform specifically designed for EVs, though it was flexible enough to underpin a variety of different body styles and sizes. The 0 Series was scheduled to start production late this year, with U.S. operations based in Ohio and set to deliver both Saloon and SUV models for the 2027 model year.

Future plans

Honda did not indicate whether it may now move to retain the Prologue in its line-up. The EV was expected to be phased out when 0 Series packages launched.

Also unclear is whether Honda will move forward, as Mibe previously indicated, with development of its own low-cost EV line. Targeting the sub-$30,000 segment has become something of a Holy Grail for the auto industry.

Ford is one example. It last year halted development of a higher-end 3-row SUV and subsequently ended production of the F-150 Lightning battery-electric pickup. But it is moving forward on its own entry program, dubbed the Universal EV, due out next year.

The list of automakers scrapping or delaying EV projects is a virtual industry who’s-who, including GM, Hyundai, Kia, Jaguar-Land Rover, Kia, Nissan, Porsche, Stellantis and Volkswagen. But a number of new models are still debuting this year and next, including the BMW iX3, Subaru Uncharted and Toyota Highlander EV.