It’s hard to believe, but Honda, which has spent decades building a reputation for bulletproof reliability and steady growth, has just posted the worst financial result in its history. For the fiscal year ending March 31, 2026, the automaker reported a loss of 423.9 billion yen (approximately $2.7 billion), marking the first time it has finished a year in the red since it began releasing results as a publicly listed company in 1957.
Naturally, Honda CEO Toshihiro Mibe, who has led the company since 2021, absorbed much of the blame and, as a result, came dangerously close to losing his job. However, several of Mibe’s recent strategic moves ultimately won the backing of the board, and for now, the man at the center of Honda’s biggest crisis in decades remains in charge.
Honda’s CEO Survives A Coup
Honda CEO Toshihiro MibeHonda
Reuters reported this week that concerns about Honda’s direction had been brewing inside the company for some time. Citing people familiar with the matter, the news agency said a group of retired but still-influential Honda executives began discussing ways to remove Mibe last year, blaming him for the automaker’s shrinking footprint in China (down from 8% market share to 3% under Mibe), a troubled EV strategy, and what they saw as Mibe’s interest in activities away from Honda’s core business.
Among Mibe’s most prominent critics was Nobuhiko Kawamoto, the executive who led Honda through most of the 1990s. According to Reuters‘ sources, Kawamoto met with Mibe in April and urged him to step down amid growing concerns about the company’s performance. Kawamoto confirmed to the news agency that he met with Mibe but declined to reveal what was discussed.
A Disastrous EV Program
Honda 0 Series DeadHonda CarBuzz
Honda isn’t alone in facing headwinds. Like virtually every established automaker, it’s grappling with the enormous cost of developing next-generation software and EVs while fending off increasingly aggressive Chinese rivals. At the same time, the company must navigate an unpredictable tariff environment in the US, which is still Honda’s largest and most important market. Add rising geopolitical tensions in the Middle East and the potential for higher energy and shipping costs, and the challenges facing the automaker only become more daunting.
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Still, Honda’s troubles appear to run deeper than those of many of its rivals, particularly in the EV space. Last month, the company abandoned Mibe’s goal of going all electric by 2040 and booked roughly $9 billion in EV-related write-downs.
Those charges stemmed largely from the cancellation of several US-focused EV programs, including the Honda 0 Series sedan and SUV, the Acura RSX SUV, and the Afeela project developed with Sony. Honda concluded that the vehicles would be uncompetitive, and when the broader fallout from the cancellations is factored in, the total financial hit could approach $16 billion.
CEO Has Board’s Backing, For Now
Honda Hybrid Sedan Prototype (2)Honda
The fact that Mibe is still in charge suggests Honda’s board sees a path forward under the engineer-turned-CEO. Beyond a broad push to cut costs, Mibe has moved to restore an engineering-led culture within the company. In February, he shifted car development engineers out of the main automotive division and back into Honda’s companywide R&D arm, reversing a previous restructuring that critics said diluted engineers’ influence and led to more outsourcing. The move could also strengthen the motorcycle business, which generated a record $4.6 billion in profit last year, while helping Honda regain tighter control over development costs and product planning.
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And like we’ve seen at many other automakers forced to backtrack on EV pledges, Mibe has also championed a pivot toward hybrids as EV demand cools. Last year, the company announced plans to develop more hybrid vehicles, including launching up to 13 next-generation hybrid models globally starting in 2027. According to Reuters, the new hybrids will be more efficient than current designs, cheaper to build, and better suited to customer demand than many of the EV programs Honda recently shelved. Honda previewed the design of two new hybrids in May, including a sedan for Honda and an SUV for Acura with a pair of concepts.
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Honda still has plenty of work ahead of it. The automaker must rebuild its position in China, restore profitability, and regain its footing after an expensive EV misstep. But its pivot toward hybrids looks like a sensible course correction, focusing on the vehicles buyers actually want rather than chasing aggressive emissions targets.
For Mibe, however, the pressure is higher than ever. He survived an attempted revolt and retained the board’s backing, but after overseeing Honda’s first-ever annual loss, there’s little reason to think he’d survive another. The hybrid strategy may have saved his job for now, but he’ll need results to maintain it.
Sources: Reuters
