This post is a companion to the latest 3DLANES podcast episode.
I got one of those LinkedIn digest emails. You know the ones: “what people are talking about today.” Usually I delete it. This one caught my eye: Honda reports its worst year ever.
My first instinct, as a car person, was the obvious stuff. Did the Type R stop selling? Is F1 going sideways? Are they killing something I actually care about? That’s where your head goes when you’re an enthusiast and you see a headline like that. But “worst year ever” on what metric exactly? Revenue? Profit? Operating margins? China sales? North America? Compared to peak pandemic years? I needed to look at the actual numbers before buying into a headline. So I did.
Here’s what I found.
The Numbers
Let me set the baseline. Honda’s fiscal year ends March 31st. So FY2026 covers activity through March 31, 2026. All figures in billions of Japanese yen unless noted.
| Metric | FY2024 | FY2025 | FY2026 |
| Revenue (¥B) | 20,428 | 21,688 | 21,796 |
| Operating Profit (¥B) | 1,381 | 1,213 | -414 |
| Net Profit (¥B) | 1,107 | 835 | -423 |
Revenue went up. Actually went up two years in a row. So the headline isn’t about top-line growth — Honda sold more in dollar terms in FY2026 than any of the three years shown here. That part of the story doesn’t make the LinkedIn email.
The problem is below the revenue line. Operating profit swung from positive ¥1,213B to negative ¥414B. Net profit did the same. They made more money in revenue and lost money running the company. That’s the story. Revenue is not profit, and those two lines moving in opposite directions is how you end up on a LinkedIn digest.
Where the Pain Is
Let’s break it down by segment, because the headline doesn’t tell you that Honda’s motorcycle division is quietly doing well. Motorcycle revenue went from ¥3.6M to ¥4M, and segment profit went from ¥663K to ¥731K. Up on both lines. The motorcycle business is healthy.
Automotive is the problem. Revenue dropped from ¥14M to ¥13.8M, and profit swung from ¥243K to -¥1,411K. The auto division is losing money at a significant rate. Then there’s the EV piece. Honda reported roughly ¥1.577B in EV-related losses in FY2026 alone, split between cost of sales and R&D. That is not a rounding error. That’s a real line item. Whether it pays off is the open question.
The Region Breakdown
North America is actually Honda’s best story. FY2026 was their best U.S. result since 2021. The Honda brand hit 1.297 million units in the U.S., up 0.4%. Light truck sales broke 900,000 units. Electrified model sales exceeded 400,000 units. Acura went up 1%. North America makes up roughly 42–44% of Honda’s global car volume, and it performed. That part of the business is fine.
China is not fine. This is the real wound.
| Year | China Unit Sales |
| 2020 | 1,668,000 |
| 2025 | 645,000 |
Honda lost over a million units in China in five years. That’s not a bad quarter. That’s a structural collapse in a market they were heavily dependent on. The cause is not complicated: Chinese domestic EV brands have taken the market, and Honda hasn’t been competitive there. China production fell 16% in FY2026 alone.
Japan fell from 668K to 609K units. Asia excluding Japan was down 18% for the nine months ended December 2025. The regions outside North America are under real pressure.
Was the Headline Clickbait?
Partially. Revenue was up. North America performed. The motorcycle business is healthy. Those things are real and they don’t make the alert email. But the profit numbers are accurate. Operating and net profit are both negative for the year. China is a structural problem that isn’t going to resolve quickly. And Honda is absorbing enormous EV investment costs right now, costs that show up in the income statement today without the returns that might justify them later. FY2025 earnings per share missed consensus by a wide margin (¥0.18 actual vs. ¥0.72 estimate). FY2026 beat (¥0.76 vs. ¥0.52 consensus). The stock is still down 12.6% for calendar year 2026.
So, is it the worst year ever? In terms of profit, it’s hard to argue otherwise based on what’s in the statement. In terms of everything else, it’s more complicated than a LinkedIn subject line. I think Honda is investing in something. The EV losses are too specific and too large to be accidental. Whether that investment has a clear product roadmap or they’re figuring it out as they go, that part I can’t answer from a financial statement alone.
What I can say is this: if you only read the headline, you missed both the bad news and the good news. Make your own judgment. That’s why I pulled the numbers myself.
Thank you for stopping by,
DL
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