Honda scraps 0 Series EV models

Honda has cancelled its upcoming 0 Series saloon and SUV just months before production was due to begin, marking a significant shift in the company’s electric vehicle strategy.

The two EVs had been scheduled to enter production in the United States later this year, but the carmaker has confirmed the programme has now been scrapped as it reassesses its global EV plans. The US-market Acura RSX has also been cancelled as part of the decision.

The saloon and SUV were intended to be the first of seven models in Honda’s planned 0 Series EV range, which the company had previously said would be launched before the end of the decade. Both vehicles were based on a new dedicated electric platform developed specifically for the programme.

The saloon, first previewed in concept form in 2024, had been expected to launch first, with the SUV to follow shortly after.

Honda says the decision will result in a significant financial impact, with the company forecasting losses of 340–570 billion yen (NZ$3.7–6.2b) in the current financial year. Further losses are also expected in the 2026–27 financial year as the effects of the cancellation flow through the business.

In explaining the move, Honda says: “Honda determined that starting production and sales of these three models in the current business environment where the demand for EVs is declining significantly would likely result in further losses over the long term.”

The company points to changing market conditions in the United States as a key factor, including policy changes introduced by Donald Trump that have removed incentives previously supporting EV purchases and manufacturing.

Honda says the policy shift had created an “unfavourable impact” on its business and notes that prior to the changes it had “pursued EV adoption with strong determination” in the US market.

The company also says it is facing increasing challenges in Asia, where it reports a “decline in the competitiveness of Honda products” as consumer expectations evolve.

According to Honda, buyers are increasingly prioritising software-driven features and digital capabilities rather than traditional strengths such as fuel efficiency and interior space. At the same time, Chinese EV manufacturers are able to respond more quickly to market trends due to shorter development cycles.

Honda says these factors have “intensified the competition” and contributed to financial pressure on the business.

The company adds that its “automobile business has fallen into an extremely challenging earnings situation due to various factors, including its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs”.

It further warns that “Honda is undergoing significant changes, and the outlook remains uncertain”.

Looking ahead, Honda says it plans to restructure its global operations to regain competitiveness.

The company says it will prioritise strengthening its presence in the US and Japan through model updates and more competitive pricing, while expanding its hybrid line-up in Asia, particularly in growing markets such as India.

Honda also says it will take a more flexible approach to EV development, adding it will be “monitoring the balance between profitability and market trends”, suggesting updates to profitable existing models may take priority over launching entirely new electric vehicles.

As part of the restructuring, some Honda executives will forfeit part of their bonuses scheduled to be paid at the end of the financial year.