Last month, Honda announced that its carmaking unit posted an operating loss of over $1 billion from April through December 2025, largely because of the changing EV market and U.S. import tariffs.
Now, we get to see some consequences to the fact that Honda Motor Company’s automobile division is effectively in the red, namely the cancelation of three all-electric models that were in the late stages of development and were projected to be built and sold in North America—the Honda 0 Sedan, 0 SUV, and Acura RSX.
The Acura RSX Was Supposed to Enter Production This Year in Ohio
Kristin Shaw
This is a very big deal because the Acura RSX and Honda 0 SUV were supposed to enter production this year in the U.S., while the Honda 0 Sedan had been delayed to 2027. Automakers don’t simply cancel upcoming models so far down the development line; for Honda to do so it means that the situation is very serious.
Honda’s official explanation for this surprise decision is that “it was made as part of the reassessment of the company’s automobile electrification strategy due to various factors including recent changes in the business environment.”
And now comes the shocking part: canceling the three models so late will see Honda record huge losses in its consolidated financial results for the fiscal year ending March 2026—approximately $15.7 billion (2.5 trillion yen), to be exact.
Honda’s shocking shift will result in a change of strategy going forward, with the automaker noting that it will reassess its allocation of resources and “further strengthen its hybrid models.”
Additionally, while Japan and the United States will remain its main markets, Honda intends to develop its model lineup and cost competitiveness in India, where an expansion of the market is expected. The automaker will also introduce next-generation hybrid models in other countries in Asia as well to improve its competitiveness. More details about the reshuffle of Honda’s mid- to long-term strategy will be announced at a press conference in May.
A Lose-Lose Situation for U.S. Auto Workers and Buyers
The canceled Honda 0 Sedan and SUV and the Acura RSX crossover, which were supposed to be built in Ohio, will deal a big blow to the state and federal economy.
The Acura RSX was supposed to start production later this year, with Honda already showing a pre-production prototype of the crossover coupe. The now stillborn RSX built on Honda’s new 0 series architecture would have come with a dual-motor AWD powertrain and a sporty feel—at least compared to the recently discontinued ZDX that was based on GM’s BEV3 platform.
As for the Honda 0 Sedan and 0 SUV, they were developed by the Japanese automaker from the ground up as pure-play EVs built on a bespoke electrical/electronic (e/e) platform designed to support software updates, AI, a new Asimo OS software system, and manufacturing technology advancements.
The Honda 0 SUV was supposed to compete against the Tesla Model Y and other similar models, while the low-slung 0 Sedan was aimed at Tesla Model 3, BMW i4 and even the Lucid Air, among other upscale electric sedans. Both models were shown as concept models at CES 2025.
