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Honda reports a $3.6 billion loss for the year due to rising costs of EV restructuring

Honda warned that it would suffer a loss as high as $3.6 billion this year due to the rising cost of restructuring their struggling EV business.

Japan's second largest automaker is the latest to announce a multi-billion-dollar loss due to a cooling in demand for EVs. This is especially true of the United States.

Washington, under President Donald Trump has withdrawn the 'plug' on government support for EVs. This has forced Ford and Stellantis to rethink their strategy.

Toshihiro Mbe, Honda's CEO, said at a press event that the company would "scrap the development of certain planned EV models" and instead focus on hybrids. The demand for hybrids has soared in the United States as well as elsewhere.

The Japanese automaker expects to make a loss of up to 570 billion yen (about $3.6 billion) for the year ending March. This is a significant change from the previous forecast of a profit worth 550 billion.

The company stated that it expects to incur up to 2.5 trillion yen worth of?expenses over several financial years as a result of the new strategy.

The automaker announced that Mibe and Executive Vice President Noriya Kaihara would voluntarily give up?the equivalent 30% of their compensation during the next three months, while other executives will give up 20%.

Honda will announce a new mid-to long-term strategy for its business in the next financial year. $1 = 158.9400 Japanese yen (Reporting and editing by Clarence Fernandez, Christopher Cushing and Clarence Fernandez)

(source: Reuters)