The recent shifts in the global automotive market are pushing several historic brands into crisis — especially those that failed to read the signals coming from China in time. Honda is now facing an existential reckoning, and at the center of it is a very Japanese power struggle: a faction of retired executives trying to force the company’s current CEO out the door.
They failed. But Honda’s problems haven’t gone away.
Honda’s “old guard” turns on CEO Mibe
The revolt began quietly late last year, when a group of former Honda executives started meeting privately to discuss what they saw as the company’s mounting failures. Lunches, closed-door meetings, private group chats — some involving current middle managers — all converged on the same conclusion: Toshihiro Mibe, who has led Honda since 2021, had steered the company onto the wrong course.
Their grievances: he underestimated the Chinese market, ploughed too many resources into electric vehicles, and spent too much executive energy on sponsorships at the expense of operational priorities.
The campaign reached its peak in April, when former CEO Nobuhiko Kawamoto showed up in person at Honda’s Tokyo headquarters and asked Mibe directly to step down. Mibe refused.
The EV miscalculation
Honda is grappling with the same dilemma facing most legacy automakers: how to keep traditional combustion-engine production profitable while investing in electrification — all while Chinese rivals are gaining ground at speed.
So far, Honda is losing that race.
The high-profile Afeela project — a partnership with Sony to develop an electric SUV and sedan — has been scrapped. Honda’s ambition to have a fully battery-electric fleet by 2040 has also been quietly scaled back. And most damaging of all: $9 billion ( €8 billion) in investments earmarked for three electric models have been written off after those programs were cancelled.
Honda’s share of the Chinese market collapsed from 8% in 2020 to just 3% in 2025. Critics argue that Mibe’s reluctance to appear at China’s major auto shows — where rivals sent their top executives — was a symbolic mistake reflecting a broader strategic blindness.
What comes next
Mibe has responded with a restructuring plan, the centerpiece of which is a 30% reduction in hybrid engine development costs. Suppliers, however, say they have yet to receive specific details about how those savings will be achieved — a sign of the execution uncertainty still hanging over the plan.
The financial damage is becoming clearer. Market analysts are projecting an operating net loss of between €2.7 billion and €3.7 billion ( $2.9 billion to $4.0 billion) for the current fiscal year. That would be Honda’s first annual operating loss in nearly 70 years.
In a gesture signaling the severity of the situation, Mibe and executive vice president Kaihara have both announced voluntary 30% cuts to their own annual compensation.
What the Honda crisis illustrates, more broadly, is that the transition to electric mobility was never purely a product engineering challenge — it was a geopolitical and strategic one. Companies that treated China as a secondary market are now paying a steep price.
Editor’s note
This article was originally published in Italian on money.it by Andrea Fabbri on July 01, 2026 as «Honda rischia di chiudere un bilancio in rosso per la prima volta in 70 anni. I vecchi dirigenti si scagliano contro l’ad». It has been translated and adapted for an international audience by the Money.it International desk.
