Honda Motor Co. announced it will cancel development and market launch of three electric vehicle models planned for North American production as part of a reassessment of its automobile electrification strategy.

The cancelled models include the Honda 0 SUV, Honda 0 Saloon, and Acura RSX. Honda cited declining EV demand and unfavorable business conditions as factors in the decision.

The company expects to record operating expenses of 820 billion yen to 1.12 trillion yen ($5.5 billion to $7.5 billion) and a share of loss from equity method investments of 110 billion to 150 billion yen in its current fiscal year ending March 31, 2026. Special losses of 340 billion to 570 billion yen are anticipated in non-consolidated results.

Honda estimates total losses from the electrification strategy reassessment could reach a maximum of 2.5 trillion yen ($16.7 billion) when including potential future expenses.

The automaker cited several challenges affecting its business, including changes in U.S. tariff policies impacting gasoline and hybrid vehicle operations, declining competitiveness in Asia due to resource allocation toward EV development, and slower EV market expansion in the U.S. following eased fossil fuel regulations and revised EV incentives.

Honda said it will reassess resource allocation and strengthen hybrid models while enhancing its presence in India's expanding market. The company plans to introduce next-generation hybrid models across Asian markets and establish a fixed-cost structure appropriate for its business scale.

Despite the financial impact, Honda maintained its dividend forecast for the current fiscal year, citing its dividend on equity ratio policy for shareholder returns.

The company plans to announce details of its revised mid-to-long-term automobile business strategy at a press conference in May 2026.