TOKYO — Honda Motor Co said on Friday it would increase R&D spending this financial year by nearly a quarter to boost its competitive edge in hybrid and other electrified vehicles, as it forecast a 2.8% rise in operating profit for 2024/25.

Japan's second-largest automaker by volume announced a share buyback worth up to 300 billion yen ($1.93 billion) after beating analysts' fourth quarter earnings estimates, helped by strong sales growth in the United States, which offset a decline in China.

A weaker Japanese yen and robust hybrid model sales also contributed to Honda's profit.

The company forecast full-year operating profit would rise to 1.42 trillion yen compared with an average profit estimate of 1.39 trillion yen in a poll of 22 analysts by LSEG.

Honda, which is a latecomer to purely electric vehicles that only run on a battery, plans to spend 1.19 trillion yen for research and development this year, up 23% from the previous year, it said.

"Our current plan is to create an environment that allows us to produce 2 million hybrid models in a year by 2030, and we have been planning our business strategy taking into account necessary investment," CEO Toshihiro Mibe told reporters.

Operating profit for the three months to March 31 grew more than six-fold from a year earlier to 305.6 billion yen, well ahead of the 248.3 billion yen average expected by nine analysts.

Car makers are focusing more on hybrid vehicles as sales of fully electric vehicles disappoint. South Korea's Hyundai Motor Co said on Wednesday that it plans to use investment already lined up for the United States to produce hybrid vehicles at its electric vehicle plant there.

Honda's Mibe said he is seeing "good progress" in ongoing talks with rival Nissan Motor over a possible partnership to collaborate on producing EV components, and that he hopes to update the market in the near future.

For the January-March period, Honda posted a 17% sales rise in its biggest overseas market, the U.S., to about 378,000 vehicles. However, its sales in China fell by more than 6% to about 207,000 vehicles. In China, the world's biggest auto market, Honda is amongJapanese car brands that have struggled against more nimble andfaster-moving local rivals that have attracted Chinese driverswith low-cost, technology-loaded electric vehicles.

The company said last month it plans to build an EV production base in Ontario, Canada and launch six EV models branded Ye in China by 2027.

Honda Stock Sinks as Japanese Automaker Sees Big Financial Hit From US Tariffs

Tue, May 13, 2025

U.S.-listed shares of Honda Motor (HMC) fell 6% Tuesday when the Japanese automaker warned it will have a significant drop in profit because of uncertainty over new U.S. tariffs. It will also postpone plans for a new Canadian electric vehicle supply chain as demand for EVs slides.

For the fiscal year ending March 31, 2026, Honda sees net profit slumping 70% year-over-year to 250.0 billion yen ($1.69 billion). It expects operating profit declining 59% to 500.0 billion yen ($3.38 billion), and sales to fall 6.4% to 20.30 trillion yen ($137.27 billion).

Honda Director, President, and Representative Executive Officer Toshihiro Mibe explained in the call with analysts that the tariffs would have a negative impact of JPY650 billion ($4.40 billion) in the current fiscal year. "I think the tariff impact will continue to change as time goes by, and we have to think about these major changes taking place," Mibe said, according to a transcript provided by AlphaSense.

Mibe noted that Honda was already looking at ways to respond, saying that "if the tariff measures are to be in place for a long time, then we will have to increase our production capacity in the United States."


Honda Postponing EV Operation in Canada

Mibe also pointed out that its plan announced in April 2024 of an EV operation in Canada would be put on hold for at least two years since "in North America, the EV market growth is slowing down."

Honda Motor reports 76% plunge in operating profit in huge earnings miss

Tue, May 13 2025

Japanese auto giant Honda missed fiscal fourth-quarter earnings estimates as operating profit plunged 76%, with the company bracing for the full impact of U.S. tariffs.

Here are Honda’s results compared with mean estimates from LSEG:
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• Revenue: 5.36 trillion yen ($47.26 billion) vs. 5.36 trillion yen
• Operating profit: 73.5 billion yen vs. 275.52 billion yen

For its financial year ended in March 2025, revenue came in at 21.69 trillion yen, compared with the average estimate of 21.63 trillion yen from LSEG and marking a 6.2% rise year on year.

Operating profit fell 12.2% to 1.21 trillion yen, against the average LSEG estimate of 1.41 trillion yen.

Net profit for its full year declined 24.5% to 835.84 billion.

While its motorcycle business achieved record high sales volume and operating profit, Honda’s automobile business saw a drop in sales, mainly in China and Southeast Asia.

Hybrid electric vehicle sales in North America, however, expanded due to higher EV incentives in the region.

Honda’s results come amid trade tensions with the U.S., which has slapped a 25% tariff on foreign automobile imports.

In March, Honda had reportedly decided to produce its next-generation Civic hybrid in the U.S. state of Indiana, instead of Mexico, to avoid potential tariffs on one of its top-selling car models, Reuters reported.

According to U.S. car marketplace CarPro, Asian automakers made up six of the top eight automakers in the U.S. by sales volume in 2024, with Honda in fourth place.

In its earnings release, Honda had downgraded almost every financial metric for its current fiscal year ending in March 2026, compared with its latest full-year results. Its full-year operating profit is projected to fall almost 59% to 500 billion yen.

Honda’s projected net profit saw an even deeper cut at 70.1% lower, plunging to 250 billion yen, while revenue is expected to slip 6.4% to 20.3 trillion yen.

Japan’s second-biggest automaker explained that the impact of tariff policies worldwide would be very significant on its business, with the frequent revisions making it difficult to formulate an outlook.

“Moving forward, we will carefully assess the impact of tariff policies and expand recovery measures while aiming for further growth in operating profit,” the company said in its presentation.

Honda also changed its dividend policy from a dividend payout ratio to a “dividend on equity,” forecasting an increase of 2 yen per share to 70 yen per share for its current fiscal year.

Back in February, Honda and rival Nissan terminated talks over a $60 billion merger, which would have created the world’s third-largest automaker by sales volume.

Honda said it will reduce its planned EV investments by $21 billion, claiming that it’s doing so due to a slowdown in EV sales which isn’t actually happening.

Instead, it will focus on hybrids, which get 100% of their energy from fossil fuels, and which cause climate change and poison the air you breathe.


Honda’s announcement came earlier today in Japan, stating that it will scrap its plan for EVs to be 30% of its global vehicle sales by 2030, citing a “slowdown in the expansion of the EV market due to several factors, including changes in environmental regulations.” It will reduce planned investment from 10 trillion yen ($69 billion) to 7 trillion ($48 billion).