Honda has made a sharp course correction on electric vehicles, cancelling three planned US-built models and slashing production of its marquee EV. The automaker confirmed it will not move forward with the Zero Series SUV, the Zero Series saloon, or the Acura RSX. At the same time Honda cut Prologue output in half, leaving expected sales at roughly 17,900 units.
Company executives and spokespeople pointed to weak demand, tariff pressures, profitability challenges and the repeal of the federal EV tax credit by Congress last year as key reasons for the retrenchment. The result is a reallocation of resources back toward hybrids and away from some battery electric vehicle programs.
The decision adds to a growing wave of writeoffs and program delays across the industry. Honda said the EV pullback contributes to projected losses that could approach $16 billion for the automaker, a figure that helps push the industry’s total EV restructuring bill toward about $70 billion in writedowns.
Observers see the companys move as part of a broader market reset. Tom Libby of S&P Global Mobility noted that EV registrations plunged 41 percent, calling the decline a ‘reset’ that will be followed by a slow climb back. Other manufacturers are responding similarly, with Hyundai and Kia among those postponing or cancelling some EV projects.
At the dealer level, not every signal is negative. Stellantis dealers remain upbeat about upcoming internal combustion and hybrid products, including new performance trucks, a refreshed Pacifica, the returning Ram ProCity, an all new Jeep Grand Cherokee and Grand Wagon, updates to the Gladiator and Wrangler, and a revived Jeep Cherokee.
Analysts caution that the market could swing the other way if external events push fuel costs sharply higher. Some point to geopolitical risk, saying a major conflict such as a war centered on Iran could lift gasoline to as much as $6 per gallon and revive interest in EVs. Meanwhile, rising diesel prices are squeezing suppliers and adding cost pressure across the supply chain.
Honda’s pivot highlights the profitability challenges automakers face now that federal EV incentives have been pared back. Industry experts expect electric vehicle adoption to recover, but say the path will be prolonged and uneven as manufacturers balance investment costs, customer demand and regulatory shifts.
This episode underscores the financial toll of the EV slowdown and signals a more cautious approach across the sector, with hybrids regaining favor while pure EV programs are reassessed.
Source: https://www.autonews.com/ev/an-automaker-ev-writedowns-expand-honda-0312/
