Honda on Tuesday projected a 59% decline in operating profit for the current financial year and announced a two-year delay to its planned electric vehicle (EV) supply chain project in Canada, citing growing uncertainty from tariffs and softening global EV demand.
Japan’s second-largest automaker expects operating income to fall to 500 billion yen ($3.38 billion) in the fiscal year ending March 31, 2026, down from 1.21 trillion yen in the year just ended. The forecast reflects the automaker’s struggle to navigate U.S. President Donald Trump’s tariffs on foreign-made vehicles, which have intensified cost pressures across the industry.
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Honda also said it will postpone by “approximately two years” its planned investment in an EV supply chain in Ontario, a project first announced in April 2024. The company attributed the delay to the “current slowdown in EV demand,” further complicating its long-term electrification strategy.
Tariffs are expected to deal a 650 billion yen blow to Honda’s fiscal 2026 operating profit, the company said. Of that, 300 billion yen will come from duties on imports of around 550,000 finished vehicles. Honda said it aims to offset roughly 200 billion yen of this impact through internal mitigation measures.
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“Although the automotive industry is in a very difficult situation, we will definitely look for new directions of growth through strategic partnerships,” Honda Chief Executive Toshihiro Mibe said at a news conference.
He added that no new developments had occurred regarding a potential tie-up with Nissan since merger talks collapsed in February. The two automakers continue to collaborate on select technologies, but closer integration appears to be off the table for now.
