Honda said Tuesday that its earnings weakened sharply in the first nine months of its fiscal year, citing pressure from U.S. trade measures and a more difficult outlook for electric vehicles, especially in the American market.
The Tokyo-based automaker reported that profit for the nine months through December fell 42% from the same period a year earlier. Net profit totaled 465.4 billion yen (about $3 billion), down from 805.2 billion yen in the prior-year period. Honda noted this was the second consecutive year in which profit for the nine-month stretch declined, a disappointing trend for a company known globally for models like the Accord, Civic, and Odyssey.
Revenue also slipped. Honda’s sales for the three quarters decreased 2.2% to 15.98 trillion yen (roughly $102.6 billion), compared with the previous year. Even with the softer results, Honda kept its full-year profit forecast unchanged at 300 billion yen (about $1.9 billion), signaling that it still expects performance to stabilize over the remainder of the fiscal year.
Honda pointed to mixed factors behind the outcome. It said weakening momentum for EVs in the U.S. was a drag on results, reflecting a broader cooling of demand for battery-powered vehicles. At the same time, the company emphasized that its motorcycle business held up relatively well, offering some cushion against the headwinds in other segments.
In a sign of how quickly its strategy is evolving, Honda also revised a key long-term EV target. The company lowered its projected global EV sales ratio for 2030 to 20%, down from a previously stated goal of 30%. Honda said it has also halted development of some electric models, arguing that market conditions are shifting and that it needs to adjust plans accordingly.
The political backdrop in the U.S. has also complicated the landscape for automakers. The Trump administration has taken a more favorable stance toward oil and gas and has rolled back earlier initiatives that were intended to accelerate the spread of EVs—programs that had expanded during the Biden administration as part of a push for cleaner transportation.
Trade policy has been another major factor. Honda said tariffs under President Donald Trump weighed on its earnings. Last year, Trump reduced tariffs on automobiles and auto parts to 15% from a previously announced 25%. Japan, for its part, pledged $550 billion in investment toward U.S. projects.
More broadly, tariffs remain a significant concern for Japan’s export-driven economy, particularly for manufacturers that rely heavily on overseas markets. Honda’s update followed other notable news from the sector: last week, Toyota reported a decline in recent profit and said its chief financial officer, Kenta Kon, would become the company’s next chief executive and president.
Japanese politics and markets have also been in focus. Prime Minister Sanae Takaichi, who took office in October as Japan’s first female leader, won a sweeping parliamentary election victory over the weekend. Analysts expect the result to make it easier for her party to advance policies aimed at supporting growth, including increased government spending in areas such as technology and defense.
Despite Honda’s weaker earnings report, investors responded positively. Honda shares rose 2.1% in Tuesday trading, while the Nikkei 225 climbed 2.3%, reaching a record high for the second day in a row amid a rally partly linked to Takaichi’s popularity.
