One of the world's most popular car brands has announced that it is cutting three of its electric vehicle models in response to mounting losses and "changes in the business environment".
Honda has confirmed plans to cancel the development and market launch of three electric cars planned for production in North America.
The Japanese company said this decision to make a "major strategic shift" was in response to President Donald Trump axing measures to boost the uptake of EVs in the United States.
Honda said it focused on electric vehicles "based on the belief that EVs will be the optimal solution" to slash emissions in transport, especially on a long-term outlook.
While it acknowledged that it had been making progress in developing electric vehicle technology, it was leveraging its position based on its existing internal combustion engine and hybrid business.
The profitability of the Honda auto business has been affected by changes in US tariff policies, as well as a decline in the competitiveness of Honda products in Asia.
The automaker said its Asian business had been affected because it was allocating more resources to the switch to electric vehicles.
It referenced President Trump's decision to axe mandates for electric vehicles as another hurdle to expanding its EV operations in the United States.
Honda has cancelled some of its electric vehicle projects in response to mounting losses
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Models confirmed to be axed include the Honda 0 SUV and Honda 0 Saloon, which were debuted at CES 2025, as well as the Acura RSX.
Honda said moving ahead with production of these models in the current environment would "likely result in further losses over the long term".
It said demand for electric vehicles is "declining significantly", prompting the decision to axe its zero emission projects.
The manufacturer now expects to record write-offs and impairment losses that were earmarked for the production of these models, and additional expenses from the cancellation of the project.
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Honda debuted the 0 series line of electric cars at CES 2025
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When first presenting the Honda 0 Series models at CES 2025, the brand said the models would "redefine the EV", alongside an impressive upgrade to its operating system.
Honda said the models would be based on a new "thin, light and wise" development approach with the Saloon's angular concept design embodying these features.
At the time, the 0 Saloon was scheduled to be introduced on the North American market in 2026, before expanding its production to markets including Japan and Europe.
The 0 SUV was originally intended to be launched in the first half of 2026, although this never materialised.
It is unclear whether the recent announcement will impact the Sonda Honda Mobility project and the release of the Afeela 1
| SONY HONDA MOBILITYOne of the main focuses of 0 Series models was automated driving technology, including new SENSING Elite technology, which qualifies for Level 3 driving, also known as "eyes-off".
Its latest update on its EV operations stated: "Moreover, in order to strengthen its business structure, Honda will establish a fixed-cost structure appropriate for the scale.
"Initiatives toward the future introduction of EV models will be implemented flexibly from a long-term perspective, while monitoring the balance between profitability and market trends."
Honda will announce new details of its mid- and long-term strategy for its automotive business in May later this year.