TOKYO, Japan: Honda Motor reported its first annual loss since listing on the stock market in 1957 after taking more than US$9 billion in charges tied to restructuring its electric vehicle business.

The Japanese automaker also abandoned major long-term electric vehicle targets and suspended a planned $11 billion EV and battery project in Canada.

Honda posted an operating loss of 414.3 billion yen ($2.63 billion) for the fiscal year ended in March, compared with a profit of 1.2 trillion yen a year earlier.

The result was worse than analysts' expectations for a 315.6 billion yen loss, according to a poll by LSEG.

EV-related losses totaled 1.45 trillion yen during the year.

Toshihiro Mibe, chief executive officer of Honda Motor, said the company is dropping its goal of having electric vehicles account for one-fifth of new car sales by 2030.

He also said Honda is abandoning its target of shifting entirely to electric and fuel-cell vehicles by 2040.

Honda will indefinitely suspend its planned Canada project, which would have been the company's largest-ever investment in the country.

Despite the loss, Honda expects to return to profitability in the current fiscal year and forecasts a 500 billion yen profit, supported by cost reductions and its motorcycle business.

"The motorcycle business will expand production capacity in India ... and aim for record-high sales of 22.8 million units," Honda said in its earnings statement.

Strong motorcycle sales in India and Brazil helped offset weaker car sales in markets such as China.

"The overall execution has been very slow," said James Hong, head of mobility research at Macquarie Group.

He said some of Honda's announced strategies, such as sourcing more local components from China, were "nothing new."

Hong also warned that Honda's motorcycle division could face margin pressure as key markets such as India and Vietnam transition toward electric vehicles. "They have a limited time window to act," Hong said.

The company said rising material costs, including the impact of the conflict in the Middle East, are expected to reduce operating profit by 313 billion yen in the current fiscal year.

Investors responded positively to Honda's decision to maintain its dividend and commit to at least 800 billion yen in shareholder returns over the next three years.

Honda shares closed 3.8 percent higher in Tokyo trading.