Tokyo, May 13, 2025 — Japan’s leading automaker Honda Motor Co. announced on Tuesday a significant downward revision of its earnings outlook for fiscal year 2025, forecasting a sharp 70.1% decline in net profit.
The company expects its profit to fall to 250 billion yen (approximately 1.7 billion U.S. dollars), attributing the drop to the adverse effects of U.S. tariffs and volatile currency exchange rates.
Despite achieving a record high in revenue during fiscal year 2024, Honda’s operating profit has taken a hit. The company reported total group revenue of 21.69 trillion yen, marking a 6.2% year-on-year increase. However, operating profit slipped by 12.2%, settling at 1.21 trillion yen. Rising costs associated with increasing market presence in the United States have eaten into the gains made from robust motorcycle sales and higher vehicle prices.
For the current fiscal year, Honda has assumed that the newly imposed U.S. tariffs will remain in effect throughout the year. This scenario is expected to reduce operating profit by an estimated 650 billion yen. To counteract this, the company has unveiled a mitigation plan aimed at minimizing the impact by approximately 200 billion yen through cost-cutting initiatives and shifting more production to local U.S. facilities, resulting in a projected net loss of 450 billion yen.
In a related strategic update, Honda also announced a two-year delay in the launch of operations at its new electric vehicle (EV) manufacturing facility in Alliston, Canada. Originally scheduled to be operational by 2028, the plant was designed to produce up to 240,000 EV units annually. It was also part of Honda’s broader plan to build an integrated EV supply chain in North America in collaboration with battery and component suppliers.
This delay reflects broader concerns over the global slowdown in EV demand, as well as external economic pressures. Despite these challenges, Honda reaffirmed its commitment to long-term investment in electrification and continues to monitor market trends to adjust its strategy accordingly.