Notice Regarding the Occurrence of Losses Due to the Revision of the Four-Wheel Electrification Strategy and the Revision of the Full-Year Consolidated Earnings Forecast

Summary of Performance

Honda Motor Co., Ltd. has decided to discontinue the launch and development of certain planned EV models for North America. As a result of revising the four-wheel electrification strategy, it announced that it expects to record operating expense losses of 820 billion yen to 1.12 trillion yen and equity method investment losses of 110 billion yen to 150 billion yen in its fiscal year ending March 2026 consolidated results. Consequently, the full-year consolidated earnings forecast has been significantly revised downward, with operating income changing from the previous forecast of 550,000 million yen to a projected loss range of △570,000 to △270,000 million yen, and net income attributable to owners of parent shifting from 300,000 million yen to an estimated loss of △690,000 to △420,000 million yen.

Future Business Policy and Shareholder Returns

For the four-wheel business, in light of the slowdown in the EV market, Honda plans to strengthen HEV models and enhance its business in India, where market expansion is anticipated. It will also review fixed cost structures to strengthen its business foundation. Electrification efforts will continue long term while carefully monitoring profitability and demand trends. In connection with the losses, some executives will voluntarily forgo or reduce their remuneration, with the CEO and other directors reducing annual compensation by 25–30%. The dividend forecast remains unchanged, and stable shareholder returns will be maintained. Details of mid- to long-term strategies will be announced in the next term.