Weakened Yen Drives Honda Profit But Adds EV Restructuring Pains

Honda's operating profit reached an all-time high in the April-June quarter due to the weak Japanese yen, but this advantage will also increase the company's EV-related losses later in the fiscal year.

According to Honda CFO Masao Kawaguchi, the ultraweak Japanese yen significantly contributed to the record quarterly profit. However, it will also result in higher costs for the company when it books EV-related losses later in the fiscal year.

The impact of the weak yen on Honda's financials is a double-edged sword. On one hand, it boosted its operating profit, but on the other hand, it will increase the costs associated with the restructuring payouts to suppliers related to its electric vehicles (EVs).