Honda Motor CEO Toshihiro Mibe secured shareholder backing despite fierce criticism over the company’s first annual loss in nearly 70 years.
After overcommitting to expanding its lineup of electric vehicles, the automaker suffered over $9 billion in restructuring costs. Intense competition from Chinese rivals also contributed to the automaker’s recent losses.
Despite these setbacks, Mibe earned support for his reappointment to the Honda (HMC) board on Friday, June 26. The outcome suggests that Honda can recover by refocusing on profitable gas- and hybrid-powered vehicles, while taking a step back from its previous plans to aggressively roll out new EVs.
Honda CEO retains support after record EV write-down
At the Honda meeting, Mibe’s backing came as shareholders approved 10 other board nominees. This group includes one new director and nine individuals who were up for reappointment, reports Reuters.
Mibe had previously been criticized for Honda’s recent financial troubles, most notably when former chief executive Nobuhiko Kawamoto urged him to resign in April.
Honda’s annual loss reported in May was its first in almost 70 years. Its total operating loss for the fiscal year ending in March was $2.63 billion.
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“I would like to ?express my deepest apologies to our shareholders for the significant concern and inconvenience caused ?by the net loss recorded in the previous fiscal year’s financial results,” Mibe ?told shareholders as the meeting commenced.
If Honda had continued with its plan to sell new EVs, “it would mean the automotive business itself staying in the red for at least five years, possibly for as long as seven,” said Mibe.
Honda now plans to launch 15 new hybrids as part of a major reset, reports Autoblog. By the end of fiscal 2029, it aims to return a record operating profit of 1.4 trillion yen, which is roughly $8.9 billion.
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Why investors still trust Honda
Although Honda’s losses were substantial, it was soon followed by a major course correction. Rather than dig a deeper hole for itself by continuing to bet on unprofitable electric cars, it quickly canceled multiple new EV models.
The automaker also ended plans to launch an EV in a collaboration with Sony, choosing instead to shift that relationship’s focus to AI technologies.
This aggressive reset, along with renewed shareholder support for the current management team, signals improved investor confidence.
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Hybrid demand continues to soar, with models like the Civic and CR-V selling strongly in the United States. The brand will capitalize on this with the launch of bigger, more profitable D-segment hybrids by 2029. It will also retool North American plants to support the production of more hybrids.
Honda’s move mirrors similar strategic shifts by other major automakers as EV demand cools. With a fresh focus on the powertrains that drive most of its sales, Honda’s new strategy bodes well for investors after a rocky year.
A look at Honda’s next chapter
Along with Toyota, Honda was one of the pioneers of the hybrid vehicle with the original Insight. Over 25 years later, Honda will once again turn to its extensive experience with hybrids as it pursues a healthier balance sheet.
While EVs are unlikely to be abandoned entirely, there will be fewer short-term EV launches. Honda will expand its hybrid lineup into larger, more expensive segments; historically, the company has focused on hybrids in more price-sensitive categories.
Aside from an optimized vehicle lineup, Honda will also look to rebuild trust and maintain investor confidence with a largely unchanged group of board nominees.
Shareholders have given Honda’s leadership another chance to prove that retreating from an aggressive EV strategy is the right move.
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