Honda Scraps 0 Series Saloon And Suv In Radical Ev U-turn

Honda has canceled the 0 Series SUV and Saloon just months before production was scheduled to begin, as it restructures its EV strategy in the face of an “extremely challenging earnings situation”.

The Japanese firm announced on Thursday that the two models had been scrapped, just a few months before they were planned to enter production in the US. The US-sold Acura RSX has also been cancelled.

The SUV and Saloon were the first of seven planned '0 Series' models that Honda previously said would arrive before the end of the decade. But the company said uncertainty and increased competitiveness in the global EV market has prompted it to cancel the programme and write off the heavy costs associated with its development.

These futuristic-looking EVs were to sit on a new bespoke platform developed from a clean sheet of paper. The saloon, first shown in concept form in 2024, was pencilled to go on sale first, followed by the SUV, which was previewed last year.

The write-down decision will result in losses directly attributed to the cancellation of 340 billion to 570 billion yen (£2.7bn) this financial year, Honda said. It has not yet released its full financial statements; the financial year ends at the end of March. It warned that further losses in the next 2026-27 financial year are expected to result from this decision.

In a statement today, the car maker was candid as to why it had to cancel the models. “Honda determined that starting production and sales of these three models in the current business environment where the demand for EVs is declining significantly would likely result in further losses over the long term,” it said.

Explaining this decision, Honda pointed firstly to major changes in the US, where president Donald Trump recently rolled back a string of legislation brought in under the previous administration which incentivised both the buying and building of EVs. 

This has created an “unfavourable impact” on the business, Honda said. It added that before the laws were changed, it “pursued EV adoption with strong determination” in the country.  

The brand has also struggled in Asia, where it said that there has been a “decline in the competitiveness of Honda products”. It blamed constantly changing customer demands where buyer wants are “shifting from hardware features, such as fuel efficiency and cabin space, to software-based features that will continuously advance according to customer preferences”. 

It said it was at a disadvantage to react to this due to new EV manufacturers in the country that could “leverage their short product development cycles” to shift scope quickly depending on demand. This “intensified the competition” it said.It concluded that its “automobile business has fallen into an extremely challenging earnings situation due to various factors, including its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs”.

“Honda is undergoing significant changes, and the outlook remains uncertain,” it added.

To counter the losses, Honda will recognise its businesses in key and emerging markets in an effort to “reestablish its competitive strengths”.

As such, Honda says it will now look to be more competitive in  the US and Japan, both through model enhancements and by lowering prices. It will also focus on introducing more hybrid models in Asia, especially in the growing market of India.

The brand will also restructure its business around EVs, implementing what it calls a more flexible approach to future electric model launches. It added that it will be “monitoring the balance between profitability and market trends” , likely suggesting it will prioritise updating its most profitable and in-demand models over launching new EVs.

It added that some executives will also forfeit part of their bonuses planned to be given at the end of the financial year