Honda Slashes EV Spending, Sees Tariff Relief

Honda reported a 50% drop in quarterly profits, missing analyst expectations, due to U.S. auto tariffs and one-time EV write-downs. The company attributed about 125 billion yen of the loss to tariffs, which are expected to fall from 27.5% to 15% after a recent Japan-U.S. trade agreement. Honda raised its full-year profit forecast to 700 billion yen, citing a weaker yen and the reduced tariff impact, now projected at 450 billion yen instead of 650 billion yen. The automaker is scaling back EV investments by over $20 billion and focusing more on hybrids amid slowing EV demand. Honda's dependence on the U.S. market has grown, with plans to benefit from the USMCA and potentially expand hybrid part production in the U.S. While global sales dipped, North American and motorcycle sales in Brazil and Vietnam remained relatively strong.