Honda Motor Co. reported Tuesday that its profit fell sharply for the nine months through December, citing the effects of U.S. tariff policy and a weakening outlook for electric vehicles in the United States. Tokyo-based Honda said profit over the three quarters totaled 465.4 billion yen, down from 805.2 billion yen a year earlier.
Honda also said its three-quarter sales declined 2.2% to 15.98 trillion yen. Despite the slowdown, the automaker said it kept its full fiscal year profit forecast at 300 billion yen.
In its explanation for the results, Honda pointed to pressure from Trump’s tariffs and to slower growth in the U.S. electric-vehicle market. Honda said the slowdown in EVs was one negative factor, while performance in its motorcycle division was a plus.
Honda also described changes to its electric-vehicle strategy. The company said it lowered its global EV sales ratio projection for 2030 to 20% from a prior target of 30%. Honda added that it canceled the development of some EV models because the EV market was changing.
The tariff backdrop has also been a key issue for Japan’s export-reliant automakers, Honda said. Last year, Trump lowered tariffs on automobiles and auto parts to 15% from an earlier 25% that he initially announced, according to the report.
Honda’s announcement came as other Japanese automakers faced similar pressures. The company said Toyota Motor Corp. reported a decline in recent profit, and that Toyota’s chief financial officer, Kenta Kon, will become its new chief executive and president.
Honda’s update was also delivered alongside Japan’s political developments. Prime Minister Sanae Takaichi, who took office in October as Japan’s first female leader, won a landslide parliamentary election victory for the governing party over the weekend, a result expected to make it easier for her Liberal Democratic Party to push policies including bolstering growth through government spending on areas such as technology and defense.
In market reaction, Honda stock jumped 2.1% in Tuesday trading, and the Nikkei 225 finished 2.3% higher as it renewed a record high for a second straight day, in a rally that was set off in part by Takaichi’s popularity.