Honda Cuts Profit Forecast Amid Chip Shortages and EV Demand Slowdown

Honda Motor Co. has sharply reduced its fiscal year profit forecast to ¥550 billion ($3.6 billion), down from an earlier projection of ¥700 billion, as semiconductor shortages and weakening electric vehicle demand weigh on operations. The automaker now expects EVs to comprise just 20% of total sales, a significant drop from its 30% target.

Global auto sales projections have been trimmed to 3.34 million units from 3.62 million, with Asia's sluggish consumer demand and China's export restrictions on semiconductors exacerbating production challenges. Honda's North American plants faced operational halts after China blocked chip exports from Nexperia facilities.

The revised outlook reflects growing caution in the EV market and persistent supply chain disruptions. Analyst expectations of ¥869 billion in operating profit now appear increasingly unrealistic as Honda navigates what it describes as an 'increasingly challenging' operating environment.