Honda Motor (HMC) shares tumbled 5.08% in pre-market trading on Tuesday following the Japanese automaker's grim financial outlook and announcement of delays in its electric vehicle (EV) plans. The company cited the impact of higher U.S. tariffs on foreign-made cars as a primary factor behind its projected sharp decline in profitability.

In its latest financial forecast, Honda expects net profit to plummet by 70% to 250 billion yen ($1.68 billion) for the fiscal year ending March 2026. The company also anticipates a 6.4% drop in revenue to 20.3 trillion yen. These weak projections reflect growing concerns about the adverse effects of President Trump's tariffs on foreign cars, which could significantly impact Japan's crucial automotive industry.

Adding to investor concerns, Honda announced it would put on hold for approximately two years its previously revealed plan to build an EV supply chain in Ontario, Canada. The company attributed this decision to the current slowdown in EV demand. This postponement, coupled with the challenging tariff environment, has heightened uncertainties surrounding Honda's future growth strategies and its ability to compete in the rapidly evolving automotive market.