Honda and the Cost of Chasing the Electric Dream, A Pivot is coming.

For decades, Honda stood as one of the automotive world’s most reliable bastions of engineering sanity. Sensible cars, bullet-proof engines, and the quiet confidence of a company that knew how to build machines that actually worked. But even the mighty can be led astray when the political winds start blowing and the “hemp-trouser wearing brigade” begin lecturing the world about how cars should be built.

This week the Japanese giant announced something almost unthinkable: its first annual loss in nearly 70 years as a publicly listed company.

And the reason? Electric vehicles. Or more specifically, the financial wreckage left behind by an EV strategy that collided with market reality.

Honda has revealed it will take up to ¥2.5 trillion (around $15.7 billion) in restructuring charges after scrapping several planned electric vehicles intended for the United States market.

Among the casualties were three major EV projects that were meant to spearhead Honda’s American electric push, the Honda 0 SUV, the Honda 0 Saloon, and the Acura RSX EV.

The problem? Consumers didn’t buy into the grand EV narrative quite as enthusiastically as politicians, lobbyists and climate activists had predicted.

Demand for electric vehicles in North America has cooled, subsidies have come and gone, and the economic maths behind large-scale EV investment has suddenly started looking rather ugly.

So Honda has done what engineers tend to do when reality intrudes: admit the mistake and retreat to something that works.

The company is now shifting its focus back toward hybrid technology and conventional vehicles, as they pivot away from EV’s which is of course a tacit acknowledgement that the headlong rush toward full electrification might have been driven more by ideology than by customers.

And Honda isn’t alone. Across the industry, companies from Ford to Stellantis have written down tens of billions in EV investments that never quite delivered the promised returns.

For those of us who remember the Honda of old, the company that produced jewel-like engines, Formula One winners and motorcycles that simply refused to die, it is a sobering moment.

Not because Honda suddenly forgot how to build cars.

But because even a company famed for engineering discipline can be dragged into the sort of ideological experiment normally cooked up by policy advisers in hemp trousers.

The good news? Honda still knows how to build engines.

And judging by the size of the bill they’ve just paid, they’re unlikely to forget that lesson again anytime soon.

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