The auto industry’s massive pullback from its electric vehicle plans has claimed another victim: Honda, which posted its first annual loss since 1955.

Honda and other global automakers downshifted their EV ambitions after the Trump administration changed US emissions rules and ended a $7,500 tax credit for American buyers. EV sales fell sharply after the tax credit went away in September, and the recent spike in gasoline prices has not sparked a significant increase in EV demand by US buyers.

Car companies had expected much stricter American emissions rules, leading them to invest billions of dollars to move towards an all-electric vehicle lineup sometime in the next decade. But the Trump administration scrapped the tougher emissions rules put in place by the Biden administration and eliminated massive financial penalties automakers faced if they violated emissions rules.

Those changes led automakers to return their focus on selling large gasoline powered trucks and SUVs, on which they made the most profit. But the shift has been costly to automakers, who have been forced to write down the value of their large-scale EV investments.

For its fiscal year ending in March, Honda reported it took a 1.6 trillion yen, or nearly $10 billion, hit to its earnings, wiping out what would have otherwise been a potential $7.4 billion profit for the year. Instead, it posted a net loss of 403.3 billion yen, or $2.6 billion.

Honda also indicated it expected an additional writedown on its previous EV investment in the current fiscal year, although not enough to cause another loss.

Honda’s results follow General Motors, which reported a $7.2 billion charge in 2025 for its pullback in EV efforts, while rival Ford announced a charge of $17.4 billion for the year and Stellatis, which makes cars in North America under the Jeep, Ram, Dodge and Chrysler brands, reported a charge of 25.4 billion euros, or $29.7 billion.

GM was still able to report a profit for the year, even with its charge. But the cost of pulling back on EVs also caused Ford and Stellantis to report net losses for 2025. Ford also expects additional charges this year.

Still, automakers haven’t dropped EV plans completely. There are still tougher emissions rules coming in Europe and Asia and perhaps in a number of US states, led by California, which has a regulation on the books that would ban the sale of new gasoline powered cars by 2035, although Congress has moved to block that ban from taking effect.

Automakers are also concerned about the rising competition from Chinese automakers, which are primarily selling EVs. Chinese automakers have relatively little presence in the American market as of yet. (CNN)

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