Honda’s CEO delivered this stark verdict after touring an auto supplier factory in Shanghai.
It’s safe to say that Honda is in a bit of a pickle. It recently canceled two of its own electric vehicles, the 0 SUV and 0 Sedan, along with the Acura RSX revival. It will book up to $15.8 billion in losses, and that’s not all. The two Afeela-badged EVs it had been developing with Sony are also dead on arrival. It’s an alarming sign of how some traditional automakers are struggling to create a profitable business case for electric cars.
But the issues go deeper than just EVs. As with most long-running nameplates, Honda is having a hard time remaining competitive in China. Sales have collapsed in just a few years, from a peak of 1.62 million in 2020 to only 640,000 units in 2025. Only about half of its manufacturing footprint is being utilized, well below the 70–80 percent typically needed in the automotive industry to turn a profit. For 2026, annual output is projected to drop below 600,000 units.