Lucid Motors interim CEO Marc Winterhoff discusses the impact of high gas prices on the EV market, new model launches during the company’s investor day, his outlook on earnings and more on The Claman Countdown.
Honda announced a $15.7 billion writedown of its electric vehicle (EV) business last week as the company shifts its US strategy to respond to weak consumer demand for EVs.
Japan’s second-largest automaker said Thursday it will restructure its EV business and cancel three planned sales A battery-powered EV models were to be built and sold in the US market.
Demand for EVs has declined in recent years as consumers have shown interest in hybrid vehicles, and President Donald Trump’s administration has rolled back tax credits that helped spur EV purchases.
Honda’s move to pull back on its EV plans, and to write down the value of some of its operations in China, could cost it as much as $15.7 billion, and the company also said it will report its first annual loss in nearly 70 years. The company’s cash flow from the write-off will be due to the cost of compensating suppliers.
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Honda’s write-down comes as consumers turn away from EVs in favor of hybrids. (Jay L Clendenin/Getty Images)
Honda first unveiled two “Honda 0 Series” models, including a saloon sedan, at the CES trade show in Las Vegas in January 2024, and was expected to release the first series cars this year, starting in North America.
Those plans have been shelved, as Honda has canceled the Saloon and the Honda 0 SUV and Acura RSX.
Honda will now turn its focus to the US hybrid cars and will also look to strengthen the system and cost competitiveness in India.
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| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| HMC | HONDA MOTOR CO. LTD. | 25.70 | -0.07 |
-0.27% |
The company also said it was struggling to compete with new companies China which mainly focus on short development cycles and software technologies, such as advanced driver assistance systems (ADAS).
“In such a tough competitive environment, Honda has not been able to deliver products that offer better value for money than new ones. EV manufacturerswhich leads to a decrease in competition,” said the company.
Battery-powered vehicles made up 2.5% of Honda’s global sales of 3.4 million units last year, or about 84,000 vehicles.
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Honda has once again focused its production in the US on hybrid vehicles. (David Paul Morris/Bloomberg via Getty Images)
China is the world’s largest car market and Honda has introduced many battery-powered models to the market, but sold only 17,000 last year, accounting for just 2.5% of the country’s 677,000 vehicles sold and a fifth of all EV sales.
Honda said its efforts regarding the launch of a future EV model will be used flexibly from a long-term perspective while “monitoring the balance between profitability and profitability. market trends.”
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The company also said it will announce details related to the restructuring of its mid-term long-term strategy for its automotive business at a press conference in May.
Reuters contributed to this report.
