You should read the following discussion of our financial positions and operating results together with our consolidated financial statements included in this Annual Report. A. Operating Results Overview Honda aims to achieve a zero environmental impact of society of not only its products but also the entire product life cycle, including its corporate activities, and zero traffic collision fatalities involving our motorcycles and automobiles globally by 2050. For more details, please see Item 4. “Information on the Company—B. Business Overview—Preparing for the Future—Management Policies and Strategies.” To achieve these goals, it will be essential to make investments strategically at the appropriate timing. We will leverage the stable business foundation of ICE and hybrid models in the Automobile business, as well as the strong profitability and cash generation capabilities of the Motorcycle business and Financial services business. As we continue to invest in the field of ”intelligence”, we will also continue to advance the shift of resources to EV business. With an eye on the timing when demand for EVs will resume expanding, we will continue to lay the groundwork for EV business from a long-term perspective, while taking into account short-term fluctuations in demand. Our business is subject to a severe economic and social environment, and our profitability depends on various factors. At present, geopolitical risks in the Middle East are increasing and uncertainties regarding policy trends in various countries are rising, and we are closely monitoring these trends. 62 Table of Contents Given changes in the EV market environment in the United States, as part of the revision of our product launch plans, we decided during the year ended March 31, 2026 to cancel the launch and development of certain EV models in the U.S., and to discontinue production or reduce production volume for EV models jointly developed under a certain alliance agreement in the U.S. For details of these social issues and the risks we are subject to, please see Item 4. “Information on the Company—B. Business Overview—Preparing for the Future— Financial Strategy.” and Item 4. “Information on the Company—B. Business Overview—Preparing for the Future—Challenges to be Addressed Preferentially”, Item 3.D “Risk Factors.” In the process of, or as a result of, dealing with such social issues and risks, our sales volumes may be affected and additional costs may be incurred, which may have a significant effect on our future profitability. Business Environment The economic environment surrounding Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method in the fiscal year ended March 31, 2026 maintained a gradual recovery overall, although some regions showed weakness due to persistent uncertainty in international situations, including the situations in Ukraine, the Middle East and the South China Sea, trade policies of various countries, and others. In the United States, the economy continued a moderate expansion, driven by increased capital investment and robust consumer spending. In Europe, the economy showed signs of pickup, although the pace varied from country to country. In Asia, the economy expanded in India, and the Indonesian economy continued its moderate recovery. In China and Thailand, the economic recovery was limited. In Japan, domestic demand, mainly driven by capital investment and consumer spending, supported the economy, and a gradual recovery continued. The trends, uncertainties, demands, commitments and events identified below may continue or recur, impacting the Company’s future financial results. Overview of FYE Mar. 31, 2026 Operating Performance Honda’s consolidated sales revenue for the fiscal year ended March 31, 2026, increased from the fiscal year ended March 31, 2025, due mainly to increased sales revenue in Motorcycle business, which was partially offset by decreased sales revenue in Automobile business as well as negative foreign currency translation effects. Operating profit in the previous fiscal year turned into an operating loss, due mainly to the impact of EV-related losses as well as tariff impacts, which was partially offset by increased profit attributable to price and cost impacts. For further detail, see note “(4) Segment Information” to the accompanying consolidated financial statements for a description of the impact of EV-related losses. Motorcycle Business Honda’s consolidated unit sales of motorcycles, all-terrain vehicles (ATVs), and side-by-sides (SxS) in the fiscal year ended March 31, 2026 totaled 14,673 thousand units, increased by 7.2% from the previous fiscal year, mainly due to the increases in consolidated unit sales primarily in India, Brazil, and the Philippines, which were offset by a decrease in consolidated unit sales in Turkey. Automobile Business Honda’s consolidated unit sales of automobiles in the fiscal year ended March 31, 2026 totaled 2,711 thousand units, decreased by 4.5% from the previous fiscal year, mainly due to a decrease in consolidated unit sales primarily in Asia. Power Products and Other Businesses Honda’s consolidated unit sales of power products in the fiscal year ended March 31, 2026 totaled 3,589 thousand units, decreased by 3.0% from the previous fiscal year, mainly due to a decrease in consolidated unit sales primarily in Asia, which was offset by an increase in consolidated unit sales in Europe. 63 Table of Contents FYE Mar. 31, 2026 Compared with FYE Mar. 31, 2025 Sales Revenue Honda’s consolidated sales revenue for the fiscal year ended March 31, 2026, increased by ¥107.8 billion, or 0.5%, to ¥21,796.6 billion from the fiscal year ended March 31, 2025, due mainly to increased sales revenue in Motorcycle business, which was partially offset by decreased sales revenue in Automobile business as well as negative foreign currency translation effects. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥255.4 billion, or 1.2%, compared to the increase as reported of ¥107.8 billion, which includes negative foreign currency translation effects. Operating Costs and Expenses Operating costs and expenses increased by ¥1,735.6 billion, or 8.5%, to ¥22,210.9 billion from the previous fiscal year. Cost of sales increased by ¥1,168.6 billion, or 6.9%, to ¥18,193.4 billion from the previous fiscal year, due mainly to the impact of EV-related losses as well as tariff impacts. Selling, general and administrative expenses increased by ¥125.8 billion, or 5.4%, to ¥2,476.8 billion from the previous fiscal year, due mainly to increased expenses. Research and development expenses increased by ¥441.1 billion, or 40.1%, to ¥1,540.6 billion from the previous fiscal year, due mainly to the impact of EV-related losses. Operating Loss Operating loss was ¥414.3 billion, a decrease of ¥1,627.8 billion from the previous fiscal year, due mainly to the impact of EV-related losses as well as tariff impacts, which was partially offset by increased profit attributable to price and cost impacts. Honda estimates that by excluding negative foreign currency effects of approximately ¥77.0 billion, operating profit would have decreased by approximately ¥1,550.7 billion. With respect to the discussion above of the changes, management identified factors and used what it believes to be a reasonable method to analyze the respective changes in such factors. Management analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries. (1) “Foreign currency effects” consist of “translation adjustments”, which come from the translation of the currency of foreign subsidiaries’ financial statements into Japanese yen, and “foreign currency adjustments”, which result from foreign-currency-denominated transaction. With respect to “foreign currency adjustments”, management analyzed foreign currency adjustments primarily related to the following currencies: U.S. dollar, Japanese yen and others at the level of the Company and its material consolidated subsidiaries. (2) With respect to “price and cost impacts”, management analyzed effects of changes in sales price, cost reductions, effects of raw material cost fluctuations and others, excluding foreign currency effects. (3) With respect to “sales impacts”, management analyzed changes in sales volume and mix of product models sold that resulted in increases/decreases in profit, changes in sales revenue of Financial services business that resulted in increases/decreases in profit as well as certain other reasons for increases/decreases in sales revenue and cost of sales, excluding foreign currency effects. (4) With respect to “expenses”, management analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year excluding foreign currency translation effects. (5) With respect to “Research and Development expenses”, management analyzed reasons for an increase/decrease in research and development expenses from the previous fiscal year excluding foreign currency translation effects. 64 Table of Contents The estimates excluding the foreign currency effects are not on the same basis as Honda’s consolidated financial statements, and do not conform to IFRS. Furthermore, Honda does not believe that these measures are substitute for the disclosure required by IFRS. However, Honda believes that such estimates excluding the foreign currency effects provide financial statements users with additional useful information for understanding Honda’s results. Loss before Income Taxes Loss before income taxes was ¥403.3 billion, a decrease of ¥1,720.9 billion from the previous fiscal year. The main factors behind this decrease, except factors relating to operating profit, are as follows: Share of profit (loss) of investments accounted for using the equity method had a negative impact of ¥163.0 billion, due mainly to the impact of EV-related losses. Finance income and finance costs had a positive impact of ¥69.9 billion, due mainly to effect from gains or losses on derivatives. For further details, see note “(22) Finance Income and Finance Costs” to the accompanying consolidated financial statements. Income Tax Expense Income tax expense decreased by ¥464.8 billion to credit of ¥50.2 billion from the previous fiscal year. The average effective tax rate decreased 19.0 percentage points to 12.5% from the previous fiscal year. For further details, see “(a) Income Tax Expense” of note “(23) Income Taxes” to the accompanying consolidated financial statements. Loss for the Year Loss for the year was ¥353.0 billion, a decrease of ¥1,256.0 billion from the previous fiscal year. Loss for the Year Attributable to Owners of the Parent Loss for the year attributable to owners of the parent was ¥423.9 billion, a decrease of ¥1,259.7 billion from the previous fiscal year. Profit for the Year Attributable to Non-controlling Interests Profit for the year attributable to non-controlling interests increased by ¥3.7 billion, or 5.5%, to ¥70.9 billion from the previous fiscal year. Business Segments Motorcycle Business Honda’s consolidated unit sales of motorcycles, all-terrain vehicles (ATVs) and side-by-sides (SxS) totaled 14,673 thousand units, increased by 7.2% from the previous fiscal year, due mainly to increased consolidated unit sales in Asia. Sales revenue from external customers increased by ¥392.2 billion, or 10.8%, to ¥4,018.8 billion from the previous fiscal year, due mainly to increased consolidated unit sales. Despite changes in sales price, the impact of the price changes was immaterial on sales revenue. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥432.2 billion, or 11.9%, compared to the increase as reported of ¥392.2 billion, which includes negative foreign currency translation effects. 65 Table of Contents Operating costs and expenses increased by ¥323.7 billion, or 10.9%, to ¥3,286.9 billion from the previous fiscal year. Cost of sales increased by ¥273.3 billion, or 11.0%, to ¥2,766.3 billion, due mainly to an increase in costs attributable to increased consolidated unit sales. Selling, general and administrative expenses increased by ¥53.1 billion, or 14.6%, to ¥418.6 billion, due mainly to increased expenses. Research and development expenses decreased by ¥2.7 billion, or 2.6%, to ¥101.9 billion. Operating profit increased by ¥68.4 billion, or 10.3%, to ¥731.9 billion from the previous fiscal year, due mainly to an increase in profit attributable to sales impacts as well as price and cost impacts, which was partially offset by increased expenses. Japan Total demand for motorcycles in Japan* decreased by around 5% from the previous fiscal year to approximately 350 thousand units in the fiscal year ended March 31, 2026. Honda’s consolidated unit sales in Japan decreased by 8.5% from the previous fiscal year to 205 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of the Dio 110, which was partially offset by an increase in unit sales of the Super Cub 50. * Source: JAMA (Japan Automobile Manufacturers Association) North America Total demand for motorcycles and ATVs in the United States*, the principal market within North America, decreased by around 7% from the previous year to approximately 660 thousand units in calendar year 2025. Honda’s consolidated unit sales in North America decreased by 1.8% from the previous fiscal year to 538 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of the GROM primarily in the United States. * Source: MIC (Motorcycle Industry Council) The total includes motorcycles and ATVs, but does not include side-by-sides (SxS). Europe Total demand for motorcycles in Europe*1 decreased by around 12% from the previous year to approximately 1,140 thousand units in calendar year 2025. Honda’s consolidated unit sales in Europe decreased by 14.3% from the previous fiscal year to 407 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of the PCX. *1 This is based on Honda research and only includes the following 10 countries: the United Kingdom, Germany, France, Italy, Spain, Switzerland, Portugal, the Netherlands, Belgium, and Austria. The total includes ICE vehicles, but does not include EVs, EMs and EBs*2. *2 EM: Electric Moped with a maximum speed ranging from 25km/h to 50km/h EB: Electric Bicycle with a maximum speed of 25 km/h or slower Excluding battery-assisted bicycles Asia Total demand for motorcycles in India*1, the largest market within Asia, remained basically unchanged from the previous year at approximately 19,240 thousand units in calendar year 2025. Total demand for motorcycles in the other countries in Asia*2 increased by around 3% from the previous year to approximately 18,410 thousand units in calendar year 2025, mainly due to an increase in unit sales in Pakistan, which was offset by a decrease in unit sales in China. 66 Table of Contents Honda’s consolidated unit sales in Asia increased by 6.8% from the previous fiscal year to 11,310 thousand units in the fiscal year ended March 31, 2026, mainly due to the increases in unit sales of the Activa and SP series in India. Honda’s consolidated unit sales do not include sales by P.T. Astra Honda Motor in Indonesia, which is accounted for using the equity method. Unit sales increased by around 1% from the previous fiscal year to approximately 4,940 thousand units in the fiscal year ended March 31, 2026, mainly due to the increases in unit sales of the Stylo 160 and Vario 125. *1 This is based on Honda research. The total includes ICE vehicles, but does not include EVs, EMs and EBs. *2 This is based on Honda research and only includes the following seven countries: Thailand, Indonesia, Malaysia, the Philippines, Vietnam, Pakistan, and China. The total includes ICE vehicles, but does not include EVs, EMs and EBs. Other Regions Total demand for motorcycles in Brazil*, the principal market within Other Regions, increased by around 14% from the previous year to approximately 1,960 thousand units in calendar year 2025. Honda’s consolidated unit sales increased by 19.8% from the previous fiscal year to 2,213 thousand units in the fiscal year ended March 31, 2026, mainly due to the increases in unit sales of the Pop 110i ES and CG 160 series in Brazil. * Source: ABRACICLO (Associação Brasileira dos Fabricantes de Motocicletas, Ciclomotores, Motonetas, Bicicletas e Similares (the Brazilian Association of Manufacturers of Motorcycle, Moped, Bicycles and Similar)) Automobile Business Honda’s consolidated unit sales of automobiles totaled 2,711 thousand units, decreased by 4.5% from the previous fiscal year, due mainly to decreased consolidated unit sales in Asia and North America. Sales revenue from external customers decreased by ¥305.8 billion, or 2.2%, to ¥13,863.3 billion from the previous fiscal year, due mainly to decreased consolidated unit sales as well as negative foreign currency translation effects. Despite changes in sales price, the impact of the price changes was immaterial on sales revenue. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have decreased by approximately ¥222.9 billion, or 1.6%, compared to the decrease as reported of ¥305.8 billion, which includes negative foreign currency translation effects. Sales revenue including intersegment sales decreased by ¥300.9 billion, or 2.1%, to ¥14,166.9 billion from the previous fiscal year. Operating costs and expenses increased by ¥1,354.0 billion, or 9.5%, to ¥15,578.0 billion from the previous fiscal year. Cost of sales increased by ¥949.2 billion, or 8.2%, to ¥12,505.1 billion, due mainly to the impact of EV-related losses as well as tariff impacts. Selling, general and administrative expenses decreased by ¥40.7 billion, or 2.4%, to ¥1,666.3 billion, due mainly to decreased expenses including product warranty expenses. Research and development expenses increased by ¥445.5 billion, or 46.4%, to ¥1,406.5 billion due mainly to the impact of EV-related losses. Operating loss was ¥1,411.1 billion, a decrease of ¥1,654.9 billion from the previous fiscal year, due mainly to the impact of EV-related losses as well as tariff impacts, which was partially offset by increased profit attributable to price and cost impacts. 67 Table of Contents Proportion of retail unit sales by vehicle category and principal automobile products: Fiscal year ended March 31, 2025 2026 Passenger cars: 36 % 35 % ACCORD series, CITY, CIVIC series, FIT series Light trucks: 56 % 57 % CR-V series, FREED, HR-V series, ODYSSEY, PASSPORT, PILOT, VEZEL series Mini vehicles: 8 % 8 % N-BOX Although there are various factors that affect the profitability of each vehicle category, sales price is an important factor in determining profitability. In general, the weighted average sales price in the light trucks category is higher relative to the total average sales price, while the weighted average sales price in the mini vehicles category, which is unique to the Japanese market, is relatively lower, although sales price varies from model to model. In general, the contribution margin of the light trucks category tends to be higher relative to the total weighted average contribution margin because the sales price is higher, while the contribution margin of the mini vehicles category tends to be relatively lower because the sales price is lower, although the level of contribution margin varies from model to model. For example, in Japan and the United States, which are the main sales markets for our automobiles, the contribution margin of our light trucks category was approximately 15% higher, our passenger cars category was approximately 5% lower and our mini vehicles category was approximately 70% lower compared with weighted average contribution margin for the fiscal year ended March 31, 2026. It should be noted that we define contribution margin as an amount per unit of net sales minus material cost, which is thought to increase in almost direct proportion to net sales volume. Japan Total demand for automobiles in Japan*1 decreased by around 1% from the previous fiscal year to approximately 4,530 thousand units in the fiscal year ended March 31, 2026. Honda’s consolidated unit sales in Japan*2 decreased by 4.5% from the previous fiscal year to 515 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of the WR-V. Honda’s unit production of automobiles in Japan increased by 2.1% from the previous fiscal year to 707 thousand units in the fiscal year ended March 31, 2026. *1 Source: JAMA (Japan Automobile Manufacturers Association), as measured by the number of regular vehicle registrations (661cc or higher) and mini vehicles (660cc or lower) *2 Certain sales of automobiles that are financed with residual value type auto loans and others by our Japanese finance subsidiaries and provided through our consolidated subsidiaries are accounted for as operating leases in conformity with IFRS and are not included in consolidated sales revenue to external customers in the Automobile business. Accordingly, they are not included in consolidated unit sales. North America Total demand for automobiles in the United States*, the principal market within North America, increased by around 2% from the previous year to approximately 16,350 thousand units in calendar year 2025. 68 Table of Contents Honda’s consolidated unit sales in North America decreased by 3.0% from the previous fiscal year to 1,605 thousand units in the fiscal year ended March 31, 2026, mainly due to the decreases in unit sales of the PROLOGUE and PILOT. Honda’s unit production of automobiles in North America decreased by 3.5% from the previous fiscal year to 1,552 thousand units in the fiscal year ended March 31, 2026. * Source: Autodata Europe Total demand for automobiles in Europe* increased by around 2% from the previous year to approximately 13,270 thousand units in calendar year 2025. Honda’s consolidated unit sales in Europe decreased by 3.2% from the previous fiscal year to 90 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of the CITY. * Source: ACEA (Association des Constructeurs Europeens d’Automobiles (the European Automobile Manufacturers’ Association)) New passenger car registrations cover 27 EU countries, three EFTA countries, and the U.K. Asia Total demand for automobiles in Asia*1 increased by around 4% from the previous year to approximately 9,230 thousand units in calendar year 2025, mainly due to the increases in demand in India and Vietnam, which were offset by the decreases in Taiwan and Indonesia. Total demand for automobiles in China*2 increased by around 10% from the previous year to approximately 34,600 thousand units in calendar year 2025. Honda’s consolidated unit sales in Asia decreased by 13.6% from the previous fiscal year to 343 thousand units in the fiscal year ended March 31, 2026, mainly due to the decreases in unit sales of the BRIO and HR-V in Indonesia. Honda’s consolidated unit sales do not include unit sales of Dongfeng Honda Automobile Co., Ltd. and GAC Honda Automobile Co., Ltd., both of which are joint ventures accounted for using the equity method in China. Unit sales substantially decreased by 25.4% from the previous fiscal year to 586 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of the BREEZE. Honda’s unit production by consolidated subsidiaries in Asia*3 substantially decreased by 21.1% from the previous fiscal year to 375 thousand units in the fiscal year ended March 31, 2026. Meanwhile, unit production by Chinese joint ventures Dongfeng Honda Automobile Co., Ltd. and GAC Honda Automobile Co., Ltd. substantially decreased by 17.0% from the previous fiscal year to 637 thousand units in the fiscal year ended March 31, 2026. *1 The total is based on Honda research and includes the following markets: Thailand, Indonesia, Malaysia, the Philippines, Vietnam, India, Pakistan, and Taiwan. *2 Source: CAAM (China Association of Automobile Manufacturers) *3 The total includes the following markets: Thailand, Indonesia, Malaysia, Vietnam, India, Pakistan, and Taiwan. Other Regions Total demand for automobiles in Brazil*, the principal market within Other Regions, increased by around 3% from the previous year to approximately 2,550 thousand units in calendar year 2025. 69 Table of Contents Honda’s consolidated unit sales increased by 0.6% from the previous fiscal year to 158 thousand units in the fiscal year ended March 31, 2026, mainly due to an increase in unit sales of the WR-V in Brazil. Unit production at Honda’s plant in Brazil increased by 3.2% from the previous fiscal year to 102 thousand units in the fiscal year ended March 31, 2026. * Source: ANFAVEA (Associação Nacional dos Fabricantes de Veiculos Automotores (the Brazilian Automobile Association)) The total includes passenger cars and light commercial vehicles. Financial Services Business To support the sale of its products, Honda provides retail lending and leasing to customers and wholesale financing to dealers through its finance subsidiaries in Japan, the United States, Canada, the United Kingdom, Germany, Brazil and Thailand. Total amount of receivables from financial services and equipment on operating leases of finance subsidiaries on March 31, 2026, increased by ¥1,650.4 billion, or 11.2%, to ¥16,327.2 billion from March 31, 2025. Honda estimates that by applying Japanese yen exchange rates as of March 31, 2025, total amount of receivables from financial services and equipment on operating leases of finance subsidiaries as of March 31, 2026 would have increased by approximately ¥602.5 billion, or 4.1%, from March 31, 2025. Sales revenue from external customers increased by ¥21.7 billion, or 0.6%, to ¥3,529.4 billion from the previous fiscal year, due mainly to increased operating lease revenues, which was partially offset by decreased revenues on disposition of lease vehicles as well as negative foreign currency translation effects. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥50.0 billion, or 1.4%, compared to the increase as reported of ¥21.7 billion, which includes negative foreign currency translation effects. Sales revenue including intersegment sales increased by ¥20.5 billion, or 0.6%, to ¥3,532.7 billion from the previous fiscal year. Operating costs and expenses increased by ¥60.6 billion, or 1.9%, to ¥3,257.2 billion from the previous fiscal year. Cost of sales decreased by ¥48.9 billion, or 1.6%, to ¥2,936.1 billion from the previous fiscal year, due mainly to a decrease in costs attributable to decreased revenues on disposition of lease vehicles as well as foreign currency effects. Selling, general and administrative expenses increased by ¥109.6 billion, or 51.8%, to ¥321.1 billion from the previous fiscal year, due mainly to increased expenses. Operating profit decreased by ¥40.1 billion, or 12.7%, to ¥275.5 billion from the previous fiscal year, due mainly to increased expenses. Power Products and Other Businesses Honda’s consolidated unit sales of power products totaled 3,589 thousand units, decreased by 3.0% from the previous fiscal year, due mainly to decreased consolidated unit sales in Asia. Sales revenue from external customers totaled to ¥384.9 billion basically unchanged from the previous fiscal year. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have decreased by approximately ¥3.9 billion, or 1.0%. Sales revenue including intersegment sales increased by ¥5.7 billion, or 1.4%, to ¥420.3 billion from the previous fiscal year. Operating costs and expenses increased by ¥6.9 billion, or 1.6%, to ¥431.0 billion from the previous fiscal year. Cost of sales increased by ¥4.8 billion, or 1.5%, to ¥328.0 billion, due mainly to foreign currency effects. Selling, general and administrative expenses increased by ¥3.8 billion, or 5.7%, to ¥70.8 billion, due mainly to increased expenses. Research and development expenses decreased by ¥1.6 billion, or 4.9%, to ¥32.1 billion from the previous fiscal year. 70 Table of Contents Operating loss was ¥10.6 billion, an increase of ¥1.2 billion from the previous fiscal year, due mainly to increased expenses as well as negative foreign currency effects, which was partially offset by increased profit attributable to sales impacts in Power products business. In addition, operating loss of aircraft and aircraft engines included in Power products and other businesses was ¥37.2 billion, an improvement of ¥1.6 billion from the previous fiscal year. Japan Honda’s consolidated unit sales in Japan increased by 7.9% from the previous fiscal year to 300 thousand units in the fiscal year ended March 31, 2026, mainly due to an increase in unit sales of OEM engines*. * OEM (Original Equipment Manufacturer) engines refer to engines installed on products sold under a third-party brand. North America Honda’s consolidated unit sales in North America decreased by 9.1% from the previous fiscal year to 927 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of lawn mowers. Europe Honda’s consolidated unit sales in Europe increased by 9.4% from the previous fiscal year to 712 thousand units in the fiscal year ended March 31, 2026, mainly due to an increase in unit sales of OEM engines. Asia Honda’s consolidated unit sales in Asia decreased by 8.4% from the previous fiscal year to 1,295 thousand units in the fiscal year ended March 31, 2026, mainly due to a decrease in unit sales of OEM engines. Other Regions Honda’s consolidated unit sales in Other Regions increased by 5.0% from the previous fiscal year to 355 thousand units in the fiscal year ended March 31, 2026, mainly due to an increase in unit sales of OEM engines. Geographical Information Based on the Location of the Company and Its Subsidiaries As of and for the year ended March 31, 2025 Yen (millions) Japan North America Europe Asia Other Regions Total Reconciling Items Consolidated Sales revenue ¥ 5,584,504 ¥ 13,108,269 ¥ 946,224 ¥ 4,896,316 ¥ 1,226,224 ¥ 25,761,537 ¥ (4,072,770 ) ¥ 21,688,767 Operating profit (loss) ¥ 191,135 ¥ 435,215 ¥ 5,328 ¥ 408,273 ¥ 177,885 ¥ 1,217,836 ¥ (4,350 ) ¥ 1,213,486 As of and for the year ended March 31, 2026 Yen (millions) Japan North America Europe Asia Other Regions Total Reconciling Items Consolidated Sales revenue ¥ 5,449,292 ¥ 12,881,908 ¥ 1,015,519 ¥ 4,880,437 ¥ 1,432,330 ¥ 25,659,486 ¥ (3,862,876 ) ¥ 21,796,610 Operating profit (loss) ¥ (765,011 ) ¥ (227,346 ) ¥ 15,849 ¥ 352,545 ¥ 214,014 ¥ (409,949 ) ¥ (4,397 ) ¥ (414,346 ) 71 Table of Contents Explanatory notes: 1. Major countries in each geographic area: North America United States, Canada, Mexico Europe United Kingdom, Germany, Belgium, Italy, France Asia Thailand, China, India, Vietnam, Malaysia Other Regions Brazil, Australia 2. Operating profit (loss) of each geographical region is measured in a consistent manner with consolidated operating profit, which is profit before income taxes before share of profit (loss) of investments accounted for using the equity method and finance income and finance costs. 3. Reconciling items are elimination of inter-geographic transactions. Japan In Japan, sales revenue from domestic and export sales decreased by ¥135.2 billion, or 2.4%, to ¥5,449.2 billion from the previous fiscal year, due mainly to decreased sales revenue in Automobile business. Operating loss was ¥765.0 billion, a decrease of ¥956.1 billion from the previous fiscal year, due mainly to the impact of EV-related losses. North America In North America, where the United States is the principal market, sales revenue decreased by ¥226.3 billion, or 1.7%, to ¥12,881.9 billion from the previous fiscal year, due mainly to decreased sales revenue in Automobile business as well as negative foreign currency translation effects. Operating loss was ¥227.3 billion, a decrease of ¥662.5 billion from the previous fiscal year, due mainly to the impact of EV-related losses as well as tariff impacts. Europe In Europe, sales revenue increased by ¥69.2 billion, or 7.3%, to ¥1,015.5 billion from the previous fiscal year, due mainly to increased sales revenue in the Automobile business as well as positive foreign currency translation effects. Operating profit increased by ¥10.5 billion, or 197.5%, to ¥15.8 billion from the previous fiscal year, due mainly to an increase in profit attributable to sales impacts as well as price and cost impacts, which was partially offset by increased expenses. Asia In Asia, sales revenue totaled to ¥4,880.4 billion basically unchanged from the previous fiscal year, due mainly to decreased sales revenue in Automobile business which was partially offset by increased sales revenue in the Motorcycle business. Operating profit decreased by ¥55.7 billion, or 13.6%, to ¥352.5 billion from the previous fiscal year, due mainly to the impact of EV-related losses as well as decreased profit attributable to sales impacts which was partially offset by increased profit attributable to price and cost impacts. Other Regions In Other Regions, sales revenue increased by ¥206.1 billion, or 16.8%, to ¥1,432.3 billion from the previous fiscal year, due mainly to increased sales revenue in the Motorcycle business. Operating profit increased by ¥36.1 billion, or 20.3%, to ¥214.0 billion from the previous fiscal year, due mainly to increased profit attributable to sales impacts, which was partially offset by increased expenses. 72 Table of Contents FYE Mar. 31, 2025 Compared with FYE Mar. 31, 2024 Sales Revenue Honda’s consolidated sales revenue for the fiscal year ended March 31, 2025, increased by ¥1,259.9 billion, or 6.2%, to ¥21,688.7 billion from the fiscal year ended March 31, 2024, due mainly to increased sales revenue in Motorcycle business as well as positive foreign currency translation effects. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥623.3 billion, or 3.1%, compared to the increase as reported of ¥1,259.9 billion, which includes positive foreign currency translation effects. Operating Costs and Expenses Operating costs and expenses increased by ¥1,428.4 billion, or 7.5%, to ¥20,475.2 billion from the previous fiscal year. Cost of sales increased by ¥1,008.1 billion, or 6.3%, to ¥17,024.7 billion from the previous fiscal year, due mainly to increased costs attributable to increased consolidated sales revenue in Motorcycle business as well as foreign currency effects. Selling, general and administrative expenses increased by ¥244.4 billion, or 11.6%, to ¥2,351.0 billion from the previous fiscal year, due mainly to increased expenses as well as the change in the estimation model for automobile product warranties*. Research and development expenses increased by ¥175.8 billion, or 19.0%, to ¥1,099.4 billion from the previous fiscal year. * During the year ended March 31, 2025, it was made possible for Honda to make reliable estimates of product warranty costs at the time products are sold to customers, since the number of automobile product units subject to specific warranty programs has increased in the recent fiscal years, historical data to support the use of its estimate on specific warranty program costs have sufficiently accumulated, and “Quality Innovation Operations” has been established to monitor progress of specific warranty programs and related costs across Honda. As such, Honda changed the estimation model to accrue the provisions comprehensively for specific warranty programs of automobile products manufactured at our major production bases at the time of vehicle sales for the year ended March 31, 2025. The change in the estimation model resulted in the increase of provisions for product warranties by ¥127,554 million for the year ended March 31, 2025, which is included in selling, general and administrative in the consolidated statements of income and included in Automobile business. Operating Profit Operating profit decreased by ¥168.4 billion, or 12.2%, to ¥1,213.4 billion from the previous fiscal year, due mainly to decreased profit attributable to sales impacts, increased research and development expenses as well as the change in the estimation model for automobile product warranties, which was partially offset by increased profit attributable to price and cost impacts. Honda estimates that by excluding negative foreign currency effects of approximately ¥93.6 billion, operating profit would have decreased by approximately ¥74.8 billion. With respect to the discussion above of the changes, management identified factors and used what it believes to be a reasonable method to analyze the respective changes in such factors. Management analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries. (1) “Foreign currency effects” consist of “translation adjustments”, which come from the translation of the currency of foreign subsidiaries’ financial statements into Japanese yen, and “foreign currency adjustments”, which result from foreign-currency-denominated transaction. With respect to “foreign currency adjustments”, management analyzed foreign currency adjustments primarily related to the following currencies: U.S. dollar, Japanese yen and others at the level of the Company and its material consolidated subsidiaries. (2) With respect to “price and cost impacts”, management analyzed effects of changes in sales price, cost reductions, effects of raw material cost fluctuations and others, excluding foreign currency effects. 73 Table of Contents (3) With respect to “sales impacts”, management analyzed changes in sales volume and mix of product models sold that resulted in increases/decreases in profit, changes in sales revenue of Financial services business that resulted in increases/decreases in profit as well as certain other reasons for increases/decreases in sales revenue and cost of sales, excluding foreign currency effects. (4) With respect to “expenses”, management analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year excluding foreign currency translation effects. (5) With respect to “Research and Development expenses”, management analyzed reasons for an increase/decrease in research and development expenses from the previous fiscal year excluding foreign currency translation effects. The estimates excluding the foreign currency effects are not on the same basis as Honda’s consolidated financial statements, and do not conform to IFRS. Furthermore, Honda does not believe that these measures are substitute for the disclosure required by IFRS. However, Honda believes that such estimates excluding the foreign currency effects provide financial statements users with additional useful information for understanding Honda’s results. Profit before Income Taxes Profit before income taxes decreased by ¥324.7 billion, or 19.8%, to ¥1,317.6 billion from the previous fiscal year. The main factors behind this decrease, except factors relating to operating profit, are as follows: Share of profit (loss) of investments accounted for using the equity method had a negative impact of ¥109.8 billion, due mainly to decreased profit at affiliates and joint ventures in Asia. Finance income and finance costs had a negative impact of ¥46.4 billion, due mainly to effect from gains or losses on foreign exchange, which was partially offset by increased interest income. For further details, see note “(22) Finance Income and Finance Costs” to the accompanying consolidated financial statements. Income Tax Expense Income tax expense decreased by ¥45.1 billion, or 9.8%, to ¥414.6 billion from the previous fiscal year. The average effective tax rate increased by 3.5 percentage points to 31.5% from the previous fiscal year. For further details, see “(a) Income Tax Expense” of note “(23) Income Taxes” to the accompanying consolidated financial statements. Profit for the Year Profit for the year decreased by ¥279.5 billion, or 23.6%, to ¥903.0 billion from the previous fiscal year. Profit for the Year Attributable to Owners of the Parent Profit for the year attributable to owners of the parent decreased by ¥271.3 billion, or 24.5%, to ¥835.8 billion from the previous fiscal year. Profit for the Year Attributable to Non-controlling Interests Profit for the year attributable to non-controlling interests decreased by ¥8.2 billion, or 10.9%, to ¥67.1 billion from the previous fiscal year. 74 Table of Contents Business Segments Motorcycle Business Honda’s consolidated unit sales of motorcycles, all-terrain vehicles (ATVs) and side-by-sides (SxS) totaled 13,685 thousand units, increased by 12.0% from the previous fiscal year, due mainly to increased consolidated unit sales in Asia. Sales revenue from external customers increased by ¥406.4 billion, or 12.6%, to ¥3,626.6 billion from the previous fiscal year, due mainly to increased consolidated unit sales. Despite changes in sales price, the impact of the price changes was immaterial on sales revenue. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥440.7 billion, or 13.7%, compared to the increase as reported of ¥406.4 billion, which includes negative foreign currency translation effects. Operating costs and expenses increased by ¥299.2 billion, or 11.2%, to ¥2,963.1 billion from the previous fiscal year. Cost of sales increased by ¥267.2 billion, or 12.0%, to ¥2,493.0 billion, due mainly to an increase in costs attributable to increased consolidated unit sales as well as foreign currency effects. Selling, general and administrative expenses increased by ¥8.9 billion, or 2.5%, to ¥365.4 billion, due mainly to increased expenses. Research and development expenses increased by ¥22.9 billion, or 28.1%, to ¥104.6 billion. Operating profit increased by ¥107.2 billion, or 19.3%, to ¥663.4 billion from the previous fiscal year, due mainly to increased profit attributable to price and cost impacts, which was partially offset by negative foreign currency effects. Japan Total demand for motorcycles in Japan* decreased by around 6% from the previous fiscal year to approximately 370 thousand units in the fiscal year ended March 31, 2025. Honda’s consolidated unit sales in Japan decreased by 7.1% from the previous fiscal year to 224 thousand units in the fiscal year ended March 31, 2025, mainly due to the decreases in sales units of the Dax125 and CT125 Hunter Cub, despite an increase in sales units of the Super Cub 50. * Source: JAMA (Japan Automobile Manufacturers Association) North America Total demand for motorcycles and all-terrain vehicles (ATVs) in the United States*, the principal market within North America, decreased by around 4% from the previous year to approximately 700 thousand units in calendar year 2024. Honda’s consolidated unit sales in North America increased by 10.0% from the previous fiscal year to 548 thousand units in the fiscal year ended March 31, 2025, mainly due to an increase in sales units of the Navi primarily in Mexico. * Source: MIC (Motorcycle Industry Council) The total includes motorcycles and ATVs, but does not include side-by-sides (SxS). Europe Total demand for motorcycles in Europe*1 increased by around 5% from the previous year to approximately 1,240 thousand units in calendar year 2024. 75 Table of Contents Honda’s consolidated unit sales in Europe increased by 8.0% from the previous fiscal year to 475 thousand units in the fiscal year ended March 31, 2025, mainly due to an increase in sales units of the PCX. *1 Based on Honda research. Only includes the following 10 countries: the United Kingdom, Germany, France, Italy, Spain, Switzerland, Portugal, the Netherlands, Belgium, and Austria. The total includes ICE vehicles, but does not include EVs, EMs and EBs*2. *2 EM: Electric Moped with a maximum speed ranging from 25km/h to 50km/h EB: Electric Bicycle with a maximum speed of 25 km/h or slower Excluding battery-assisted bicycles Asia Total demand for motorcycles in India*1, the largest market within Asia, increased by around 15% from the previous year to approximately 19,160 thousand units in calendar year 2024. Total demand for motorcycles in the other countries in Asia*2 decreased by around 1% from the previous year to approximately 18,210 thousand units in calendar year 2024, mainly due to a decrease in sales units in China, which was offset by an increase in sales units in Indonesia. Honda’s consolidated unit sales in Asia increased by 12.5% from the previous fiscal year to 10,591 thousand units in the fiscal year ended March 31, 2025, mainly due to the increases in sales units of the Activa and SP series in India. Honda’s consolidated unit sales do not include sales by P.T. Astra Honda Motor in Indonesia, which is accounted for using the equity method. Unit sales increased by around 3% from the previous fiscal year to approximately 4,910 thousand units in the fiscal year ended March 31, 2025, mainly due to the increases in sales units of the Stylo 160 and PCX. *1 Based on Honda research. The total includes ICE vehicles, but does not include EVs, EMs and EBs. *2 Based on Honda research. Only includes the following seven countries: Thailand, Indonesia, Malaysia, the Philippines, Vietnam, Pakistan, and China. The total includes ICE vehicles, but does not include EVs, EMs and EBs. Other Regions Total demand for motorcycles in Brazil*, the principal market within Other Regions, increased by around 12% from the previous year to approximately 1,710 thousand units in calendar year 2024. Honda’s consolidated unit sales increased by 13.7% from the previous fiscal year to 1,847 thousand units in the fiscal year ended March 31, 2025, mainly due to the increases in sales units of the Biz series and the Pop 110i ES in Brazil. * Source: ABRACICLO (Brazilian Association of Manufacturers of Motorcycle, Moped, Bicycles and Similar) Automobile Business Honda’s consolidated unit sales of automobiles totaled 2,840 thousand units, decreased by 0.6% from the previous fiscal year, due mainly to decreased consolidated unit sales in Asia. 76 Table of Contents Sales revenue from external customers increased by ¥601.6 billion, or 4.4%, to ¥14,169.2 billion from the previous fiscal year, due mainly to positive foreign currency translation effects. Despite changes in sales price, the impact of the price changes was immaterial on sales revenue. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥82.0 billion, or 0.6%, compared to the increase as reported of ¥601.6 billion, which includes positive foreign currency translation effects. Sales revenue including intersegment sales increased by ¥676.3billion, or 4.9%, to ¥14,467.8 billion from the previous fiscal year. Operating costs and expenses increased by ¥993.1 billion, or 7.5%, to ¥14,224.0 billion from the previous fiscal year. Cost of sales increased by ¥645.9 billion, or 5.9%, to ¥11,555.9 billion, due mainly to foreign currency effects. Selling, general and administrative expenses increased by ¥200.5 billion, or 13.3%, to ¥1,707.1 billion, due mainly to an increase in expenses as well as the change in the estimation model for automobile product warranties. Research and development expenses increased by ¥146.6 billion, or 18.0%, to ¥960.9 billion. Operating profit decreased by ¥316.7 billion, or 56.5%, to ¥243.8 billion from the previous fiscal year, due mainly to decreased profit attributable to sales impacts, increased research and development expenses as well as the change in the estimation model for automobile product warranties, which was partially offset by increased profit attributable to price and cost impacts. Proportion of retail unit sales by vehicle category and principal automobile products: Fiscal year ended March 31, 2024 2025 Passenger cars: 39 % 36 % ACCORD, CITY, CIVIC, FIT, INTEGRA, JAZZ Light trucks: 54 % 56 % BREEZE, CR-V, ELEVATE, FREED, HR-V, ODYSSEY, PILOT, VEZEL, WR-V, ZR-V Mini vehicles: 7 % 8 % N-BOX Although there are various factors that affect the profitability of each vehicle category, sales price is an important factor in determining profitability. In general, the weighted average sales price in the light trucks category is higher relative to the total average sales price, while the weighted average sales price in the mini vehicles category, which is unique to the Japanese market, is relatively lower, although sales price varies from model to model. In general, the contribution margin of the light trucks category tends to be higher relative to the total weighted average contribution margin because the sales price is higher, while the contribution margin of the mini vehicles category tends to be relatively lower because the sales price is lower, although the level of contribution margin varies from model to model. For example, in Japan and the United States, which are the main sales markets for our automobiles, the contribution margin of our light trucks category and passenger cars category were approximately 10% higher, and our mini vehicles category was approximately 70% lower compared with weighted average contribution margin for the fiscal year ended March 31, 2025. It should be noted that we define contribution margin as an amount per unit of net sales minus material cost, which is thought to increase in almost direct proportion to net sales volume. 77 Table of Contents Japan Total demand for automobiles in Japan*1 increased by around 1% from the previous fiscal year to approximately 4,570 thousand units in the fiscal year ended March 31, 2025. Honda’s consolidated unit sales in Japan*2 increased by 2.7% from the previous fiscal year to 539 thousand units in the fiscal year ended March 31, 2025, mainly due to an increase in sales units of the WR-V. Honda’s unit production of automobiles in Japan decreased by 2.0% from the previous fiscal year to 693 thousand units in the fiscal year ended March 31, 2025. *1 Source: JAMA (Japan Automobile Manufacturers Association), as measured by the number of regular vehicle registrations (661cc or higher) and mini vehicles (660cc or lower) *2 Certain sales of automobiles that are financed with residual value type auto loans and others by our Japanese finance subsidiaries and provided through our consolidated subsidiaries are accounted for as operating leases in conformity with IFRS and are not included in consolidated sales revenue to external customers in the Automobile business. Accordingly, they are not included in consolidated unit sales. North America Total demand for automobiles in the United States*, the principal market within North America, increased by around 3% from the previous year to approximately 16,040 thousand units in calendar year 2024. Honda’s consolidated unit sales in North America increased by 1.6% from the previous fiscal year to 1,654 thousand units in the fiscal year ended March 31, 2025, mainly due to the increases in sales units of the PROLOGUE and CIVIC. Honda’s unit production of automobiles in North America increased by 0.6% from the previous fiscal year to 1,608 thousand units in the fiscal year ended March 31, 2025. * Source: Autodata Europe Total demand for automobiles in Europe* increased by around 1% from the previous year to approximately 12,960 thousand units in calendar year 2024. Honda’s consolidated unit sales in Europe decreased by 9.7% from the previous fiscal year to 93 thousand units in the fiscal year ended March 31, 2025, mainly due to a decrease in sales units of the ZR-V. * Source: ACEA (Association des Constructeurs Europeens d’Automobiles (the European Automobile Manufacturers’ Association)) New passenger car registrations cover 27 EU countries, three EFTA countries, and the U.K. Asia Total demand for automobiles in Asia*1 increased by around 1% from the previous year to approximately 8,900 thousand units in calendar year 2024, mainly due to the increases in demand in India and the Philippines, which were offset by the decreases in Thailand and Indonesia. Total demand for automobiles in China*2 increased by around 4% from the previous year to approximately 31,430 thousand units in calendar year 2024. Honda’s consolidated unit sales in Asia decreased by 15.2% from the previous fiscal year to 397 thousand units in the fiscal year ended March 31, 2025, mainly due to the decreases in sales units of the BR-V and WR-V in Indonesia. 78 Table of Contents Honda’s consolidated unit sales do not include unit sales of Dongfeng Honda Automobile Co., Ltd. and GAC Honda Automobile Co., Ltd., both of which are joint ventures accounted for using the equity method in China. Unit sales substantially decreased by 33.7% from the previous fiscal year to 786 thousand units in the fiscal year ended March 31, 2025, mainly due to a decrease in sales units of the CIVIC. Honda’s unit production by consolidated subsidiaries in Asia*3 decreased by 14.8% from the previous fiscal year to 476 thousand units in the fiscal year ended March 31, 2025. Meanwhile, unit production by Chinese joint ventures Dongfeng Honda Automobile Co., Ltd. and GAC Honda Automobile Co., Ltd. substantially decreased by 33.9% from the previous fiscal year to 768 thousand units in the fiscal year ended March 31, 2025. *1 The total is based on Honda research and includes the following markets: Thailand, Indonesia, Malaysia, the Philippines, Vietnam, India, Pakistan, and Taiwan. *2 Source: CAAM (China Association of Automobile Manufacturers) *3 The total includes the following markets: Thailand, Indonesia, Malaysia, Vietnam, India, Pakistan, and Taiwan. Other Regions Total demand for automobiles in Brazil*, the principal market within Other Regions, increased by around 14% from the previous year to approximately 2,480 thousand units in calendar year 2024. Honda’s consolidated unit sales increased by 18.9% from the previous fiscal year to 157 thousand units in the fiscal year ended March 31, 2025, mainly due to an increase in sales units of the CITY in Brazil. Unit production at Honda’s plant in Brazil substantially increased by 27.0% from the previous fiscal year to 99 thousand units in the fiscal year ended March 31, 2025. * Source: ANFAVEA (Associação Nacional dos Fabricantes de Veiculos Automotores (the Brazilian Automobile Association)) The total includes passenger cars and light commercial vehicles. Financial Services Business To support the sale of its products, Honda provides retail lending and leasing to customers and wholesale financing to dealers through its finance subsidiaries in Japan, the United States, Canada, the United Kingdom, Germany, Brazil and Thailand. Total amount of receivables from financial services and equipment on operating leases of finance subsidiaries on March 31, 2025, increased by ¥1,298.7 billion, or 9.7%, to ¥14,676.8 billion from March 31, 2024. Honda estimates that by applying Japanese yen exchange rates as of March 31, 2024, total amount of receivables from financial services and equipment on operating leases of finance subsidiaries as of March 31, 2025 would have increased by approximately ¥1,561.3 billion, or 11.7%, from March 31, 2024. Sales revenue from external customers increased by ¥258.9 billion, or 8.0%, to ¥3,507.7 billion from the previous fiscal year, due mainly to increased revenue from retail loans as well as positive foreign currency translation effects. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have increased by approximately ¥115.9 billion, or 3.6%, compared to the increase as reported of ¥258.9 billion, which includes positive foreign currency translation effects. Sales revenue including intersegment sales increased by ¥260.4 billion, or 8.0%, to ¥3,512.2 billion from the previous fiscal year. 79 Table of Contents Operating costs and expenses increased by ¥218.7 billion, or 7.3%, to ¥3,196.5 billion from the previous fiscal year. Cost of sales increased by ¥179.7 billion, or 6.4%, to ¥2,985.1 billion from the previous fiscal year, due mainly to an increase in costs attributable to increased revenue from retail loans as well as foreign currency effects. Selling, general and administrative expenses increased by ¥39.0 billion, or 22.7%, to ¥211.4 billion from the previous fiscal year, due mainly to increased expenses. Operating profit increased by ¥41.6 billion, or 15.2%, to ¥315.6 billion from the previous fiscal year, due mainly to increased sales revenue. Power Products and Other Businesses Honda’s consolidated unit sales of power products totaled 3,700 thousand units, decreased by 2.9% from the previous fiscal year, due mainly to decreased consolidated unit sales in Europe, which was partially offset by increased consolidated unit sales in Asia. Sales revenue from external customers decreased by ¥7.1 billion, or 1.8%, to ¥385.1 billion from the previous fiscal year, due mainly to decreased consolidated unit sales. Honda estimates that by applying Japanese yen exchange rates of the previous fiscal year to the current fiscal year, sales revenue for the year would have decreased by approximately ¥15.2 billion, or 3.9%, compared to the decrease as reported of ¥7.1 billion, which includes positive foreign currency translation effects. Sales revenue including intersegment sales decreased by ¥7.7 billion, or 1.8%, to ¥414.6 billion from the previous fiscal year. Operating costs and expenses decreased by ¥7.1 billion, or 1.7%, to ¥424.0 billion from the previous fiscal year. Cost of sales decreased by ¥9.2 billion, or 2.8%, to ¥323.2 billion, due mainly to a decrease in costs attributable to decreased consolidated unit sales in Power products business. Selling, general and administrative expenses decreased by ¥4.0 billion, or 5.7%, to ¥66.9 billion, due mainly to decreased expenses. Research and development expenses increased by ¥6.1 billion, or 22.4%, to ¥33.8 billion from the previous fiscal year. Operating loss was ¥9.4 billion, an increase of ¥0.5 billion from the previous fiscal year, due mainly to decreased profit attributable to sales impacts as well as negative foreign currency effects, which was partially offset by increased profit attributable to price and cost impacts. In addition, operating loss of aircraft and aircraft engines included in Power products and other businesses was ¥38.8 billion, an increase of ¥5.9 billion from the previous fiscal year. Japan Honda’s consolidated unit sales in Japan decreased by 7.9% from the previous fiscal year to 278 thousand units in the fiscal year ended March 31, 2025, mainly due to a decrease in sales units of generators. North America Honda’s consolidated unit sales in North America decreased by 5.8% from the previous fiscal year to 1,020 thousand units in the fiscal year ended March 31, 2025, mainly due to a decrease in sales units of lawn mowers. Europe Honda’s consolidated unit sales in Europe decreased by 18.0% from the previous fiscal year to 651 thousand units in the fiscal year ended March 31, 2025, mainly due to a decrease in sales units of OEM engines*. * OEM (Original Equipment Manufacturer) engines refer to engines installed on products sold under a third-party brand. 80 Table of Contents Asia Honda’s consolidated unit sales in Asia increased by 9.2% from the previous fiscal year to 1,413 thousand units in the fiscal year ended March 31, 2025, mainly due to an increase in sales units of OEM engines. Other Regions Honda’s consolidated unit sales in Other Regions decreased by 0.3% from the previous fiscal year to 338 thousand units in the fiscal year ended March 31, 2025, mainly due to a decrease in sales units of OEM engines. Geographical Information Based on the Location of the Company and Its Subsidiaries As of and for the year ended March 31, 2024 Yen (millions) Japan North America Europe Asia Other Regions Total Reconciling Items Consolidated Sales revenue ¥ 5,392,760 ¥ 12,073,777 ¥ 966,320 ¥ 5,009,961 ¥ 1,081,946 ¥ 24,524,764 ¥ (4,095,962 ) ¥ 20,428,802 Operating profit (loss) ¥ 151,070 ¥ 694,940 ¥ 60,340 ¥ 397,804 ¥ 153,957 ¥ 1,458,111 ¥ (76,134 ) ¥ 1,381,977 As of and for the year ended March 31, 2025 Yen (millions) Japan North America Europe Asia Other Regions Total Reconciling Items Consolidated Sales revenue ¥ 5,584,504 ¥ 13,108,269 ¥ 946,224 ¥ 4,896,316 ¥ 1,226,224 ¥ 25,761,537 ¥ (4,072,770 ) ¥ 21,688,767 Operating profit (loss) ¥ 191,135 ¥ 435,215 ¥ 5,328 ¥ 408,273 ¥ 177,885 ¥ 1,217,836 ¥ (4,350 ) ¥ 1,213,486 Explanatory notes: 1. Major countries in each geographic area: North America United States, Canada, Mexico Europe United Kingdom, Germany, Belgium, Italy, France Asia Thailand, China, India, Vietnam, Malaysia Other Regions Brazil, Australia 2. Operating profit (loss) of each geographical region is measured in a consistent manner with consolidated operating profit, which is profit before income taxes before share of profit (loss) of investments accounted for using the equity method and finance income and finance costs. 3. Reconciling items are elimination of inter-geographic transactions. Japan In Japan, sales revenue from domestic and export sales increased by ¥191.7 billion, or 3.6%, to ¥5,584.5 billion from the previous fiscal year, due mainly to increased sales revenue in Automobile business. Operating profit increased by ¥40.0 billion, or 26.5%, to ¥191.1 billion from the previous fiscal year, due mainly to increased profit attributable to sales impacts as well as positive foreign currency effects, which was partially offset by increased research and development expenses. 81 Table of Contents North America In North America, where the United States is the principal market, sales revenue increased by ¥1,034.4 billion, or 8.6%, to ¥13,108.2 billion from the previous fiscal year, due mainly to increased sales revenue in Automobile business as well as positive foreign currency translation effects. Operating profit decreased by ¥259.7 billion, or 37.4%, to ¥435.2 billion from the previous fiscal year, due mainly to decreased profit attributable to sales impacts as well as the change in the estimation model for automobile product warranties which was partially offset by increased profit attributable to price and cost impacts. Europe In Europe, sales revenue decreased by ¥20.0 billion, or 2.1%, to ¥946.2 billion from the previous fiscal year, due mainly to decreased sales revenue in the Automobile business which was partially offset by increased sales revenue in the Motorcycle business. Operating profit decreased by ¥55.0 billion, or 91.2%, to ¥5.3 billion from the previous fiscal year, due mainly to decreased profit attributable to sales impacts as well as increased expenses. Asia In Asia, sales revenue decreased by ¥113.6 billion, or 2.3%, to ¥4,896.3 billion from the previous fiscal year, due mainly to decreased sales revenue in Automobile business which was partially offset by increased sales revenue in the Motorcycle business. Operating profit increased by ¥10.4 billion, or 2.6%, to ¥408.2 billion from the previous fiscal year, due mainly to increased profit attributable to price and cost impacts, which was partially offset by decreased profit attributable to sales impacts. Other Regions In Other Regions, sales revenue increased by ¥144.2 billion, or 13.3%, to ¥1,226.2 billion from the previous fiscal year, due mainly to increased sales revenue in the Motorcycle business and Automobile business. Operating profit increased by ¥23.9 billion, or 15.5%, to ¥177.8 billion from the previous fiscal year, due mainly to an increase in profit attributable to price and cost impacts, which was partially offset by negative foreign currency effects. B. Liquidity and Capital Resources Overview of Capital Requirements, Sources and Uses The policy of Honda is to support its business activities by maintaining sufficient capital resources, a sufficient level of liquidity and a sound balance sheet. Honda’s main business is the manufacturing and sale of motorcycles, automobiles and power products. To support this business, Honda also funds financial programs for customers and dealers. 82 Table of Contents Honda requires working capital mainly to purchase parts and raw materials required for production, as well as to maintain inventory of finished products and cover receivables from dealers and for providing financial services. Honda also requires funds for capital expenditures, mainly to introduce new models, upgrade, rationalize and renew production facilities, as well as to expand and reinforce sales and R&D facilities. Driven by our dreams, Honda is striving to further advance mobility products and services with our original technologies and ideas. By doing so, Honda aspires to be a comprehensive mobility company which will play a leading role in making a better society. In 2023, Honda redefined the Global Brand Slogan, “The Power of Dreams,” to clearly articulate our desire to offer a broad range of mobility products and services as a comprehensive mobility company while addressing the two major societal challenges: environment and safety. We hope to deliver the values of “enabling people to transcend constraints of time and space” and “augmenting their abilities and possibilities.” Honda plans to strategically allocate resources over the medium- to long- term to achieve the environment and safety values. During the three-year period ending March 31, 2029, Honda plans to reallocate resources it had scheduled to invest in EVs to hybrid vehicles, and control EV-related investments at a level of approximately ¥0.8 trillion. Honda plans to invest ¥1.0 trillion in software technologies and ¥4.4 trillion in ICE and hybrid vehicles, resulting in total resource investment of ¥6.2 trillion during this three-year period. For a description of Honda’s current plans for resource allocation relating to its business strategies, see Item 4.B. “Business Overview—Preparing for the Future—Financial Strategy—a. Strategic resource allocation over the medium- to long- term.” Honda meets its working capital requirements primarily through cash generated by operations, bank loans and corporate bonds. In the fiscal year ended March 31, 2022, the Company developed its Sustainable Finance Framework to raise a part of the funds for addressing our environmental and safety initiatives through issuing bonds and issued Green Bonds totaling US$2.75 billion thereunder. The proceeds from the issuance of the Green Bonds are used exclusively toward environmental initiatives in accordance with the Sustainable Finance Framework. The outstanding balance of the Green Bonds liabilities was US$1.75 billion as of March 31, 2026. Honda believes that its working capital is sufficient for the Company’s present requirements. The year-end balance of liabilities associated with the Company and its subsidiaries’ funding for non-Financial services businesses was ¥1,238.8 billion as of March 31, 2026. In addition, the Company’s finance subsidiaries fund financial programs for customers and dealers primarily from medium-term notes, bank loans, securitization of finance receivables and equipment on operating leases, commercial paper and corporate bonds. The year-end balance of liabilities associated with these finance subsidiaries’ funding for Financial services business was ¥12,252.7 billion as of March 31, 2026. There are no material seasonal variations in Honda’s borrowing requirements. In light of the future situation of working capital requirements and cash on hand, the Company will consider raising funds as needed. Cash Flows FYE Mar. 31, 2026 Compared with FYE Mar. 31, 2025 Consolidated cash and cash equivalents on March 31, 2026 increased by ¥589.6 billion from March 31, 2025, to ¥5,118.4 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the previous fiscal year, are as follows: Net cash provided by operating activities amounted to ¥1,135.2 billion of cash inflows. Cash inflows from operating activities increased by ¥843.1 billion compared with the previous fiscal year, due mainly to a decrease in payments for parts and raw materials as well as an increase in collections of receivables from financial services. 83 Table of Contents Net cash used in investing activities amounted to ¥852.1 billion of cash outflows. Cash outflows from investing activities decreased by ¥89.8 billion compared with the previous fiscal year, due mainly to a decrease in payments for acquisitions of investments accounted for using the equity method. Net cash used in financing activities amounted to ¥36.9 billion of cash outflows. Cash outflows from financing activities increased by ¥317.3 billion compared with the previous fiscal year, due mainly to a decrease in proceeds from financing liabilities, which was partially offset by decreased repayments of financing liabilities. FYE Mar. 31, 2025 Compared with FYE Mar. 31, 2024 Consolidated cash and cash equivalents on March 31, 2025 decreased by ¥425.7 billion from March 31, 2024, to ¥4,528.7 billion. The reasons for the increases or decreases for each cash flow activity, when compared with the previous fiscal year, are as follows: Net cash provided by operating activities amounted to ¥292.1 billion of cash inflows. Cash inflows from operating activities decreased by ¥455.1 billion compared with the previous fiscal year, due mainly to an increase in payments for parts and raw materials as well as in payments for purchase of equipment on operating leases, which was partially offset by increased cash received from customers. Net cash used in investing activities amounted to ¥941.9 billion of cash outflows. Cash outflows from investing activities increased by ¥74.6 billion compared with the previous fiscal year, due mainly to an increase in payments for additions to property, plant and equipment as well as in payments for acquisitions of other financial assets, which was partially offset by increased proceeds from sales and redemptions of other financial assets. Net cash provided by financing activities amounted to ¥280.4 billion of cash inflows. Cash inflows from financing activities decreased by ¥638.1 billion compared with the previous fiscal year, due mainly to an increase in purchases of treasury stock as well as in dividends paid. Liquidity The ¥5,066.8 billion in cash and cash equivalents as of March 31, 2026 is mainly denominated in U.S. dollars and in Japanese yen, with the remainder denominated in other currencies. Honda’s cash and cash equivalents as of March 31, 2026 corresponds to approximately 2.8 months of sales revenue, and Honda believes it has sufficient liquidity for its business operations. At the same time, Honda is aware of the possibility that various factors, such as recession-induced market contraction and financial and foreign exchange market volatility, may adversely affect liquidity. For this reason, as of March 31, 2026, finance subsidiaries that carry total short-term borrowings of ¥917.5 billion have committed lines of credit equivalent to ¥1,769.8 billion that serve as alternative liquidity for the commercial paper issued regularly to replace debt. Honda believes it currently has sufficient credit limits, extended by prominent international banks, as of the date of the filing of Honda’s Form 20-F. Honda’s financing liabilities as of March 31, 2026 are mainly denominated in U.S. dollars, with the remainder denominated in Japanese yen and in other currencies. For further information regarding financing liabilities, see note “(15) Financing Liabilities” and “(25) Financial Risk Management” to the accompanying consolidated financial statements. 84 Table of Contents Honda’s short- and long-term debt securities are rated by credit rating agencies, such as Moody’s Investors Service, Inc., Standard & Poor’s Global Ratings, and Rating and Investment Information, Inc. The following table shows the ratings of Honda’s unsecured debt securities by Moody’s, Standard & Poor’s and Rating and Investment Information as of March 31, 2026. Credit ratings for Short-term unsecured debt securities Long-term unsecured debt securities Moody’s Investors Service P-2 A3 Standard & Poor’s Global Ratings A-2 BBB+ Rating and Investment Information a-1+ AA Fitch Ratings F1 A- The above ratings are based on information provided by Honda and other information deemed credible by the rating agencies. They are also based on the agencies’ assessment of credit risk associated with designated securities issued by Honda. Each rating agency may use different standards for calculating Honda’s credit rating, and also makes its own assessment. Ratings can be revised or nullified by agencies at any time. These ratings are not meant to serve as a recommendation for trading in or holding Honda’s unsecured debt securities. Off-Balance Sheet Arrangements Honda has entered into various guarantee agreements, which mainly consist of loan commitments to dealers and guarantees for bank loans of a certain affiliate. For further details, see note “(25) Financial Risk Management (d) Credit Risk” to the accompanying consolidated financial statements. Contractual Obligations The following table shows our contractual obligations as of March 31, 2026: Yen (millions) Payments due by period Total Within 1 year 1-3 years 3-5 years Thereafter Financing liabilities ¥ 14,667,281 ¥ 5,340,953 ¥ 5,722,026 ¥ 2,060,120 ¥ 1,544,182 Other financial liabilities 637,705 227,261 141,372 56,537 212,535 Purchase and other commitments*1 157,585 131,872 25,713 — — Contributions to defined benefit pension plans*2 46,872 46,872 — — — Total ¥ 15,509,443 ¥ 5,746,958 ¥ 5,889,111 ¥ 2,116,657 ¥ 1,756,717 *1 Honda had commitments for purchases of property, plant and equipment as of March 31, 2026. *2 Since contributions beyond the next fiscal year are not currently determinable, contributions to defined benefit pension plans reflect only contributions expected for the next fiscal year. C. Research and Development The Company and its consolidated subsidiaries use the most-advanced technologies and conduct R&D activities with the goal of creating distinctive products that are internationally competitive. Product-related R&D is conducted mainly by the Company, Honda R&D Co., Ltd., and Honda Development and Manufacturing of America, LLC. R&D on production technologies centers around the Company and Honda Development and Manufacturing of America, LLC. All of these entities work in close association with our other entities and businesses in their respective regions. 85 Table of Contents The Company integrated the Automobile Business Strategy Unit and the SDV Business Development Unit of Electrification Business Development Operations into Automobile Operations, and newly established Automobile Development Operations, and integrated the Motorcycle and Power Products Electrification Business Development Unit into Motorcycle and Power Products Operations in April 2025. However, effective April 1, 2026, in response to the global business environment surrounding Honda changing faster than expected, Honda made changes to the organizational and operational structure of the Automobile Development Operations and the Automobile Operations, in order to further strengthen its ability to grasp market and technology trends more accurately and deliver the original technologies and new value of Honda to the market at the optimal timing. In order to advance Honda R&D Co., Ltd. as a research and development organization capable of continuing to create compelling products and further increase its competitiveness, the R&D functions of the Automobile Development Operations and the SDV Business Development Unit within the Automobile Operations were transferred to Honda R&D Co., Ltd. In addition, the business functions being served by the SDV Business Development Unit were reorganized into the Business Strategy Unit, and the SDV Business Development Unit was disbanded. Furthermore, as the electrification strategy for motorcycle and power products business has transitioned into the execution stage, sales, business strategy and product development functions which had been separately managed for electrification business and ICE business were integrated. Through the integrated management of electrification and ICE business, Honda aims to pursue optimal allocation of resources, continue initiatives toward carbon neutrality, and ensure the continuous creation of increasingly competitive products. A portion of the R&D expenditures at the Company and its consolidated subsidiaries has been capitalized and recorded as intangible assets. For details regarding R&D expenses recognized in the consolidated statements of income, see note “(21) Research and Development” to the accompanying consolidated financial statements. R&D activities by segment are as follows. Please note that the forward-looking statements contained herein are judgments made by Honda as of the filing date of this Annual Report and may differ materially from actual results because of uncertainties that may arise in the future, including those discussed under “Item 3. Key Information—D. Risk Factors.” Motorcycle Business In the Motorcycle business, Honda is engaged in R&D activities with the policy of “maximizing the organizational culture of embracing challenges and forming a mono-zukuri (the art of making things) team capable of continually creating products that delight our customers by overcoming changes in the business environment and offering reasonable prices.” Among major technological achievements, we launched in Japan the large road sport model CB1000F, equipped with a liquid-cooled 4-stroke DOHC inline 4-cylinder 999 cm³ engine, in November 2025, and the CB1000F SE, which is based on the CB1000F and features equipment such as a headlight cowl and a seat with dedicated color stitching, in January 2026. The CB1000F, as the flagship model of Honda’s CB product brand, represents the latest answer of the CB, which serves as the “evolving standard” of Honda’s sport motorcycle lineup, and embodies the fundamental values of road sport bikes, including the joy of riding, exhilaration, and the satisfaction of ownership. The CB1000F SE, based on the CB1000F, is specified to further enhance the sense of ownership by enriching its styling and equipment. For both the CB1000F and CB1000F SE, a newly designed camshaft with optimized valve timing and lift was adopted, achieving smooth output characteristics without dips from low to high engine speeds. In addition, different valve timing was applied to each pair of two cylinders, and a newly designed air funnel was adopted to realize torque-rich settings in the low- to mid-speed range while aiming for a powerful and resonant exhaust sound. Furthermore, the transmission features lower gear ratios for first and second gears to enhance driving force, while also ensuring ease of handling at low speeds. Moreover, the gear ratios are designed to suppress engine speed during high-speed cruising, enabling user-friendly and stress-free operation. 86 Table of Contents Furthermore, in November 2025, Honda held the world premiere of the CB1000GT, a sport tourer model equipped with a 1000 cm³ liquid-cooled DOHC inline 4-cylinder 4-stroke engine, at EICMA 2025 held in Milan, Italy. Based on the CB1000 Hornet’s 1000 cm³ liquid-cooled DOHC inline 4-cylinder 4-stroke engine, a CB1000GT-specific fuel injection (FI) setting and throttle-by-wire (TBW) system were adopted. While maintaining powerful output characteristics, the engine provides a smooth output at the onset of throttle opening, reducing fatigue for both the rider and passenger and contributing to enhanced comfort during long-distance touring. In addition, the CB1000GT features Electronically Equipped Ride Adjustment (EERA)*1 electronic suspension system as standard equipment, which recognizes the riding conditions based on various data such as body attitude, engine control information from the ECU, and wheel rotational speeds, and optimizes the damping force of the front and rear suspensions. This enables precise automatic adjustment of damping force suited to road conditions. In addition, Honda unveiled the prototype model V3R 900 E-Compressor Prototype, equipped with a V3 engine with an electronically-controlled compressor. The engine adopts a displacement of 900cc based on the exact layout of the water-cooled 75-degree V3 engine, which Honda unveiled at EICMA 2024, while pursuing a slim and compact design. Equipped with the world’s first*2 electronically-controlled compressor for motorcycles, the engine delivers highly responsive torque even from the low RPM range, by controlling compression of the intake air irrespective of engine RPM. Taking advantage of this feature, Honda is striving to achieve performance comparable to that of a 1200cc engine despite its 900cc displacement, while also contributing to high environmental performance. In addition, at the 42nd Osaka Motorcycle Show 2026 held in Osaka in March 2026, Honda unveiled the concept models CB400 SUPER FOUR E-Clutch Concept and CBR400R FOUR E-Clutch Concept. Both models are equipped with a newly designed inline 4-cylinder engine mounted on a new platform comprising the body and chassis designed to maximize the fun of the riding experience. In addition, various electronic control technologies were adopted, including the Honda E-Clutch, which automatically controls clutch operation, and a TBW system that contributes to direct throttle response, thereby providing a higher-quality riding experience. Furthermore, Honda introduced the Honda E-Clutch combined with a TBW system to the CB750 HORNET and XL750 TRANSALP, and launched them in April 2026 as the CB750 HORNET E-Clutch and XL750 TRANSALP E-Clutch. By combining and coordinating the control technologies of TBW and Honda E-Clutch, the system optimizes the throttle valve opening and engine response when the throttle is opened, thereby contributing to more flexible and comfortable clutch operation and throttle control according to the rider’s skill level and riding conditions. When downshifting, the TBW system matches the engine speed during half-clutch control, enabling the absorption of rotational differences in a short period of time and reducing shift shock. Moreover, in situations such as sudden deceleration or when the rear tire bounces due to uneven road surfaces, the system detects the possibility of such rear tire behavior based on the difference in wheel speeds between the front and rear wheels, and stabilizes vehicle behavior by intervening with half-clutch control. In terms of layout, compared to the conventional Honda E-Clutch, the lift mechanism has been configured with a dual-axis structure, enabling the clutch actuator to be positioned toward the front, thereby achieving a more compact system without making significant changes to the engine structure. As part of our initiatives to achieve a zero environmental impact society, Honda aims to achieve carbon neutrality in all of its motorcycle products during the 2040s. To achieve this goal, Honda is working toward the electrification of motorcycles as an integral pillar of its future environmental strategy. Honda has positioned 2024 as the first year for its global expansion of electric motorcycles and will begin full-scale entry into the electric motorcycle market. 87 Table of Contents In addition, in November 2025, Honda unveiled its first electric motorcycle, the Honda WN7, to the public at EICMA 2025 held in Milan, Italy. The Honda WN7 is powered by a newly developed, compact and lightweight water-cooled motor with an integrated inverter, delivering a maximum output of 50 kW, equivalent to a 600 cc ICE motorcycle, and maximum torque of 100 Nm, comparable to a 1000 cc class ICE motorcycle. This ensures powerful yet composed performance both in stop-and-go city riding and cruising on open roads. Power from the motor is transmitted via a newly designed gearbox to a belt-drive system, which drives the rear wheel while contributing to quiet operation. The Honda WN7 is equipped with a newly developed 9.3 kWh fixed lithium-ion battery, supporting both CCS2*3 fast charging and Type 2*4 normal charging. With a fast charger, the battery can be charged from 20% to 80% in approximately 30 minutes, allowing for quick recharging on the go and reducing the stress of waiting time. In addition, normal charging fully charges the battery from 0% to 100% in under 2.4 hours*2, providing a cruising range of 140 km (WMTC mode) on a full charge. The Honda WN7 will be produced at Honda’s Kumamoto Factory, the company’s global hub for motorcycle production, and will be introduced sequentially to global markets where electrification is advancing. Furthermore, in March 2026 the Honda WN7 won the Gold Award, the highest honor in the Product Design discipline of the iF DESIGN AWARD, one of the most prestigious design awards in the world. Furthermore, in March 2026, Honda launched in Japan the electric two-wheeler personal commuter ICON e: in the first-class moped category, which adopts a removable battery as its power source. This removable battery can be charged in two ways—either while mounted on the vehicle or as a standalone unit—using a compact charger that is easy to carry. A compact in-wheel motor is adopted for the rear wheel, and by efficiently controlling motor output through the power control unit, the model achieves a cruising range of 81 km per charge (measured in a steady-state test at 30 km/h), enabling clean and quiet riding. In addition, in February 2026, Honda launched in Thailand the electric two-wheeled personal commuter Honda UC3, equivalent to a 110cc class ICE model, which is equipped with a fixed battery. For its power source, the Honda UC3 adopts Honda’s first fixed-type lithium ion phosphate (LFP) battery. The motor is a wheel-side motor developed and manufactured in-house by Honda, producing a maximum output of 6.0 kW. By optimizing regenerative control and magnetic circuit design to improve efficiency, the Honda UC3 achieves a cruising range of 122 km per charge*5. Honda plans to expand the introduction of the Honda UC3 to Vietnam and, looking ahead, will continue introducing electric motorcycles globally on an annual basis, offering a broad lineup tailored to diverse customer needs. R&D expenditures in this segment incurred during the fiscal years ended March 31, 2024, 2025 and 2026 were ¥79.9 billion, ¥103.5 billion and ¥112.3 billion, respectively. *1 EERA is a registered trademark owned by Astemo, Ltd. *2 Based on Honda research (as of November 2025) *3 CCS2: Combined Charging System Type 2, a connector standard used for electric vehicle fast chargers. *4 When using a 200V power supply and charging gun. *5 WMTC Mode 1, Thailand certified value. Automobile Business In the Automobile business, Honda is engaged in research and development activities under the policy of “demonstrating collective strength for appealing and strong products, and ensuring continuing growth of the Automobile business by deepening the process of mono-zukuri.” 88 Table of Contents Among major achievements, we launched the all-new Prelude, the sixth-generation model, in September 2025. The all-new Prelude became the first model equipped with the original Honda e:HEV hybrid system with Honda S+ Shift control technology. The Honda S+ Shift emulates a virtual 8-speed transmission on the motor-driven Honda e:HEV system and precisely controls the engine RPM during acceleration and deceleration to realize direct drive response and sharp gear shifting feel as if the vehicle features a stepped transmission system. Through this technology, Honda aims to provide exhilarating driving at the will of the driver, further “synchronizing” the driver and the vehicle. Honda plans to deploy this Honda S+ Shift technology to its hybrid models, starting with the all-new Prelude. In addition, in November 2025, Honda held the Honda Automotive Technology Workshop, where it unveiled next-generation technologies for electrified models planned to be launched in the second half of the 2020s. The next-generation platform, which is scheduled to be adopted for hybrid models to be introduced from 2027 onward, is being developed by combining various innovative technologies, including technologies to realize both high body rigidity and lightweight at a high level, as well as a modular architecture that enables greater parts commonality. Through these technologies, Honda seeks to further enhance the “joy of driving” unique to Honda, enabling the driver to enjoy a sporty and exhilarating driving experience. In particular, as a new benchmark for driving stability, which directly influences vehicle dynamic performance, Honda established a new approach to body rigidity management. By optimizing the body rigidity, the body weight will be reduced. At the same time, by causing the vehicle to behave as if the body flexes during cornering, the load on each tire will be controlled to improve roadholding performance, thereby realizing an unprecedented level of driving stability and a sporty and pleasant driving experience. In addition, Honda is developing a next-generation hybrid system for large-size vehicles in the D-segment and above, which combines powerful driving performance, towing capability and outstanding environmental performance. As a next-generation large-size hybrid system equipped with newly developed drive units and a battery pack that achieve both high efficiency and low cost, Honda aims to introduce products in the North American market, where there is solid demand for large-size vehicles, in the second half of the 2020s. In the EV segment, in September 2025, Honda launched the all-new N-ONE e: mini-EV. While inheriting the packaging design approach based on the Honda M/M (man maximum, machine minimum) concept*1, the N-ONE e: features a powerful and clean driving experience and quietness unique to EV models. Moreover, with the goal of being a mini-EV that will be trusted by a wide range of customers as a “standard EV,” the N-ONE e: realizes a range per charge of 295 km*2, which will give peace of mind to customers using this vehicle as their everyday car. In addition, the N-ONE e: won the Car of the Year award at the 2025–2026 Japan Automotive Hall of Fame awards. In addition, at the Japan Mobility Show 2025 held in October 2025, Honda presented the world premiere of the Super-ONE Prototype, a compact EV, and the prototype of the next-generation EV Honda 0 a. The Super-ONE Prototype was developed as a compact EV designed to transform everyday mobility into an exciting and uplifting experience, by adding features designed to stimulate all of the driver’s senses to the “joy of driving” realized by sporty driving only small EVs can achieve. Moreover, Boost Mode, developed exclusively for this model, increases the power output to enable the power unit to fully unleash its performance potential, while also synchronizing the simulated 7-speed transmission and the Active Sound Control system to generate powerful engine sound and sharp gearshift feel, as if driving an engine-powered vehicle with a traditional multi-gear transmission. Through these features, the Super-ONE Prototype stimulates the driver’s senses—including visual and auditory senses, as well as a tactile sensation of acceleration and vibration—offering an uplifting EV driving experience. The production model based on the Super-ONE Prototype is scheduled to be launched in Japan starting in 2026, followed by other regions with strong demand for compact EVs, such as the U.K. and various Asian countries*3. In addition, the production model of the Honda 0 a, equipped with technologies that embody the Honda 0 Series development approach—“Thin, Light, and Wise.”—is scheduled to go on sale globally, mainly in Japan and India, starting in 2027. Honda will continue to work to advance our efforts toward achieving carbon neutrality. 89 Table of Contents R&D expenditures in this segment incurred during the fiscal years ended March 31, 2024, 2025 and 2026 were ¥869.9 billion, ¥1,074.2 billion and ¥1,029.2 billion, respectively. *1 The “man maximum, machine minimum” concept is a basic approach to Honda car design, which calls for maximizing the space available for people and minimizing the space required for mechanical components. *2 Range per charge (tested by the Japanese Ministry of Land, Infrastructure, Transport and Tourism): 295 km in the WLTC mode. The range per charge is measured under the specified test conditions. The range may vary significantly depending on the usage environment (weather, traffic congestion, etc.) and driving style (sudden acceleration, use of air conditioning, etc.) of each customer. WLTC (Worldwide harmonized Light vehicle Test Cycles) mode is an internationally standardized driving mode consisting of city, suburban and highway driving modes, with time allocated according to average use time. *3 The production model is scheduled to be launched under different names depending on the region: Super-ONE in Japan and the Asia & Oceania region; Honda Super-ONE in some of Asia & Oceania countries; Super-N in the U.K. Power Products and Other Businesses In the Power products and other businesses, Honda is engaged in R&D activities based on the policy of “creating the lifestyles of the future, taking usefulness and joy to the next level.” Among major technological achievements, in May 2025, Honda launched the large outboard motor BF300, equipped with a V8 300 horsepower engine, as part of the 4-stroke outboard motor BF Series, which has been well received for its strong acceleration performance and fuel efficiency. The BF300 is based on a specially designed V8 engine developed for Honda’s flagship outboard model BF350, and delivers powerful performance and rich torque with a displacement of 4,952 cm³ and a maximum output of 300 horsepower. Despite its high output, the engine is capable of operating on regular gasoline. In addition, it achieves excellent fuel efficiency through an air-fuel ratio feedback function that uses an O2 sensor to correct the fuel injection volume. Other than outboard motors, we added hybrid snow throwers HSS960i and HSS1370i to our small snow blower lineup. The J type, equipped with a standard rotating auger*1, was launched in July 2025, while the JX type, equipped with a cross auger*2, was launched in September 2025. Both the HSS960i and HSS1370i adopt Honda’s original hybrid system, in which the snow removal section is driven by an engine and the driving section by a motor. This system enables smooth operation and speed control according to workload, achieving both ease of use and powerful snow removal performance. For the JX type of both models, Honda’s proprietary “cross auger” snow removal mechanism, which further facilitates snow removal work on compacted snow, has been adopted for the first time for Honda hybrid snow throwers. Furthermore, the same type is equipped with an “electric auger height” function, which enables even inexperienced users to easily adjust the auger height according to snow depth using a switch located on the handle. Furthermore, at Equip Exposition 2025 held in Louisville, Kentucky, U.S.A. in October 2025, Honda presented the world premiere of two ProZision series models, the first battery-powered riding mower series to be developed and sold by Honda, including the ProZision Autonomous, which operates autonomously, and the ProZision, which will operate manually. The ProZision series combines advanced mowing technologies Honda has amassed through years of R&D of various types of lawn mowers with the latest autonomous and intelligent technologies. These models feature outstanding terrain handling capability that stands up to difficult landscaping conditions, as well as outstanding cutting performance with Honda MicroCut® Twin Blades. The ProZision Autonomous is capable of operating in autonomous mode by memorizing and accurately following mowing routes and patterns pre-set by the operator, while recognizing its accurate location using Global Navigation Satellite System (GNSS)*3. During operation, onboard radar and LiDAR sensors provide 360-degree sensing of the surroundings to detect changes in terrain and obstacles and enable the system to automatically determine the appropriate mowing route. As a result, the ProZision Autonomous makes it possible to operate safely and achieve a high-quality lawn finish without requiring a human operator on board. 90 Table of Contents In the aircraft business, Honda has created new value with uniquely developed leading-edge technologies. We have been building an operating base in order to grow our aircraft business from a long-term perspective. In October 2025, the HondaJet became the first twin-engine very light business jet in the world to complete a successful test flight running a 100% blend of sustainable aviation fuels (SAF). SAF is attracting attention as one of the means to reduce CO2 emissions in the aviation sector and achieve carbon neutrality. The use of SAF is subject to certification standards set by ASTM International, which define the maximum allowable blending ratio with conventional jet fuel. While the current limit is 50%, this test flight involved a comprehensive technical evaluation of engine performance, combustion characteristics, and the impact on flight systems when operating on a 100% SAF blend, and important validation data were obtained toward future expansion of SAF utilization. This achievement represents a significant step toward identifying and addressing technical challenges for wider SAF adoption and contributes to Honda’s mid- to long-term environmental strategy as well as strengthening product competitiveness. Furthermore, in February 2026, Honda obtained certification from the Federal Aviation Administration (FAA) for the Emergency Autoland (EAL) system to be equipped on the HondaJet Elite II. As a result, the HondaJet Elite II has become the first production model twin-turbine very light business jet certified to equip EAL. As the name Emergency Autoland implies, the EAL system is designed to enable the aircraft to land autonomously in an emergency situation where the pilot has become incapacitated. The system may be initialized either by pushing a button to engage the EAL, or by automated monitoring systems, which can detect pilot unresponsiveness that may render EAL activation appropriate. When active, the EAL system automatically transmits an emergency code and conducts radio calls to alert air traffic control to the emergency. EAL-equipped aircraft can autonomously evaluate weather, terrain, fuel, and runway dimensions to select the optimal diversion airport, configure the aircraft for landing, navigate along the approach path, land the aircraft, and apply the brakes to a full stop on the runway. From the onset of an emergency through a complete stop, the system autonomously manages and controls the operation, enabling safe and secure flight operations even in emergency situations. Following the FAA certification of EAL, Honda Aircraft Company will begin sales of the HondaJet Elite II equipped with this system in the United States and will also begin offering the system to existing HondaJet Elite II customers through after-sales support. Furthermore, Honda Aircraft Company is pursuing certifications from regulatory agencies in other markets and plans to offer the system sequentially in global markets, including Japan, where the HondaJet Elite II is currently sold. R&D expenditures in this segment during the fiscal years ended March 31, 2024, 2025 and 2026 were ¥26.4 billion, ¥32.8 billion and ¥33.2 billion, respectively. *1 A mechanism in which the auger (blade that gathers snow) rotates forward. *2 A mechanism in which the auger simultaneously performs forward rotation to intake snow and reverse rotation to suppress the lifting of the snow blower. *3 Global Navigation Satellite System (GNSS) is a collective name for satellite positioning systems. Research for Next-Generation Technologies In research for next-generation technologies, Honda exhibited a new model of the mobility robot UNI-ONE at Expo 2025 Osaka, Kansai, held from April to October 2025. UNI-ONE is a seated personal mobility robot developed based on Honda’s robotics research, which enables the user to move simply by shifting their body weight while seated, leaving both hands free. Since 2023, Honda has conducted paid demonstration use at various companies and facilities to verify user needs and business feasibility. Through these verifications, it was confirmed that UNI-ONE can coexist with pedestrians even in crowded environments and significantly reduces user fatigue compared to walking. Based on these findings, the new UNI-ONE has been improved to suppress instability when switching to the high-position mode during operation, making it easier to ride, and the maximum slope angle has been increased to 10 degrees (compared to 6 degrees for the previous model). In addition, the cruising range has been extended to 10 km (compared to 8 km for the previous model), thereby enhancing practicality. 91 Table of Contents In June 2025, Honda conducted a launch and landing test of an experimental reusable rocket* (6.3 m in length, 85 cm in diameter, 900 kg dry weight/1,312 kg wet weight) developed independently by Honda, and successfully completed the test. This test marked the first launch and landing test conducted by Honda to demonstrate key technologies essential for rocket reusability, such as flight stability during ascent and descent, as well as landing capability. The rocket behaved as intended by Honda for the launch and landing (reaching an altitude of 271.4 m, landing within 37 cm of the target touchdown point, with a flight duration of 56.6 sec), and Honda obtained data during the ascent and descent of this successful test. This achievement was recognized for its contribution to the expansion of Japan’s space transportation capability, as well as for enhancing the autonomy of space access and strengthening international competitiveness, and was awarded the Prime Minister’s Award at the 7th Space Development and Utilization Awards hosted by the Cabinet Office of the Government of Japan. Honda aims to develop a “sustainable rocket” as part of Honda mobility that contributes to sustainable transportation in the space domain, not only through reusable rocket technologies but also by using renewable fuels (biomethane/green methane), thereby achieving a carbon-neutral society. Honda will continue its efforts toward its next technology development milestone of realizing the capability to enable a suborbital launch by 2029. R&D expenditures incurred in research for next-generation technologies are distributed among Honda’s business segments. * A reusable rocket, also known as a reusable launch vehicle, is a type of rocket that, unlike a conventional expendable launch vehicle, can be used repeatedly in a short period of time. A reusable rocket is launched in a vertical position, reaches an altitude of around 100 kilometers, and then lands back on earth while maintaining a vertical position. Patents and Licenses As of March 31, 2026, Honda owned more than 12,200 patents in Japan and more than 24,900 patents abroad. Honda also had applications pending for more than 4,300 patents in Japan and for more than 10,400 patents abroad. While Honda considers that, in the aggregate, Honda’s patents are important, it does not consider any one of such patents, or any related group of them, to be of such importance that the expiration or termination thereof would materially affect Honda’s business. D. Trend Information See Item 5.A “Operating Results” for information required by this item. E. Critical Accounting Estimates Not applicable. 92 Table of Contents