Honda recognised ¥508.7bn of additional provision in the six months to September 30, 2026, for compensation owed to suppliers after it scaled back its electric-vehicle plans, according to its half-year securities report filed on November 11. The charge is an estimate, not a settlement. The report says Honda measured it in light of its talks with suppliers, and that both the timing of any cash outflow and the size of the provision depend on how those talks develop.
What the provision covers
The report says the provision mainly covers losses or costs from compensating suppliers over parts procurement for EV models. Some contracts include clauses that require compensation if minimum purchase volumes are missed or orders are cancelled. Honda ties the charge to its decision in the previous fiscal year to cancel the launch and development of EV models planned for North America, and to decisions to end production or cut volumes of an EV model co-developed under a specific alliance contract. It began compensation talks with some partners before that year closed, and in the latest half began an inquiry into the effects on several related counterparties.
The balance of EV-related loss provisions stood at ¥582.7bn on September 30, down from ¥647.5bn on April 1, after drawdowns of ¥548.0bn during the half. An affiliate also recognised compensation income from a Honda subsidiary, which, net of related EV losses, amounted to a ¥41.8bn gain inside Honda's equity-method income. The report names no supplier and gives no overall claim figure.
Motorcycles carry the profit
Group revenue rose 13.2% to ¥12.04tn. Operating profit rose 48.1% to ¥648.7bn despite the EV losses, pretax profit rose 40.5% to ¥740.9bn, and profit attributable to owners of the parent rose 65.7% to ¥516.8bn.
Motorcycles earned an operating profit of ¥439.0bn, up 19.2%, on revenue of ¥2.27tn, up 18.3%. Four-wheel vehicles made an operating loss of ¥5.7bn, ¥67.2bn better than a year earlier, which Honda attributes to sales effects, tariff effects and currency, partly offset by the EV losses. Auto revenue rose 9.9% to ¥7.54tn. Consolidated auto unit sales rose 3.1% to 1.404mn, while group sales, which include equity-method affiliates, fell 6.6% to 1.569mn, with Asia down 35.6% to 273,000. Financial services earned ¥210.9bn, up 47.3%.
Astemo moves onto Honda's books
On October 1, 2026, after the half closed, Honda bought a further 21.0% of the voting rights in Astemo for ¥152.3bn in cash. That lifts its stake from 40.0% to 61.0% and makes the auto-parts and machinery-systems maker a consolidated subsidiary.
Honda's stated reason is software. It calls Astemo an important partner with strong hardware and software skills, and says it needs to lead the company as parent so that Astemo can build the AI and software capability the software-defined-vehicle era demands. Because the deal closed so close to the approval date, initial accounting is unfinished and the report does not disclose the assets and liabilities acquired.
Cash and shareholders
Operating cash flow was ¥632.9bn and cash ended the half at ¥5.50tn. Spending on property, plant and equipment rose to ¥825.1bn from ¥233.7bn a year earlier. Honda bought back almost no shares in the half, against ¥670.9bn in the same period a year earlier. The board declared an interim dividend of ¥35 per share, ¥136.4bn in total, payable from December 8.