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Honda has projected up to $15.7 billion in losses over a two-year period due to a major overhaul of its electrification strategy.
James Pethokoukis reports that Honda is now among the latest automakers impacted by weakening demand for electric vehicles in the U.S. and intensified competition from China. It will be the first time Honda has faced this level of financial setback tied to its electrification initiatives.
Honda’s unprecedented losses underscore the heightened volatility permeating both the automotive and broader industrial sectors. The company’s electrification pivot, unfolding against a backdrop of shifting global demand and resource repricing, reflects many of the structural headwinds seen previously in sectors where rising productivity has buffered economic shocks, as detailed in recent analysis of the U.S. nonfarm productivity surge. Meanwhile, global energy variables—exemplified by the influence of Brent crude prices—continue to shape the operating environment for automakers, adding further complexity to strategic planning going forward.