Honda has canceled the development and planned U.S. Production of three electric vehicle models – the Honda 0 SUV, the Honda 0 sedan and the Acura RSX – citing financial losses and shifting market conditions. The decision, announced earlier today, comes after showcasing prototypes of the vehicles at the CES technology conference in Las Vegas in early 2025, with the Acura RSX slated for release in the second half of 2026.
The Japanese automaker anticipates losses between $5.1 billion and $7 billion (820 billion–1.12 trillion yen) for the current financial year, according to statements released today. This prompted a reassessment of its EV strategy, leading to the cancellation of the three U.S.-bound models. Honda officials stated that the move is intended to “improve the current earnings situation as early as possible.”
Several factors contributed to the decision. The company pointed to the impact of ongoing trade wars and associated tariffs, which have increased the cost of importing vehicles into the United States. Honda cited the rollback of U.S. Government emissions and fuel economy standards as diminishing the incentive to invest heavily in electric vehicle development. The expiration of the $7,500 EV tax credit in September 2025 also played a role, according to company statements.
Though, challenges in the Chinese market proved to be a significant driver of the change in strategy. Honda acknowledged it is struggling to compete with domestic Chinese EV manufacturers, who are prioritizing software features and rapid updates over traditional automotive strengths like fuel efficiency and interior space. Chinese consumers, Honda stated, are demanding a level of software integration and continuous improvement that the company currently struggles to deliver.
The Honda 0 sedan, described as having a striking, Lamborghini-inspired design, and the 0 SUV were intended to be flagship models in Honda’s new ‘0 Series’ of electric vehicles. The Acura RSX, a performance-oriented SUV coupé, was expected to expand Acura’s presence in the growing EV market. The cancellation of these projects represents a substantial financial setback for Honda, with the company estimating expenses and losses of approximately $15.7 billion (2.5 trillion yen) related to the program’s termination.
Honda’s announcement signals a shift in focus towards hybrid vehicles, as the company seeks to mitigate financial losses and adapt to evolving market dynamics. The company did not provide details on future EV plans beyond the cancellation of these three models.
