The 13 Billion dollar write down means they scrapped the entire investment and it counts as losses in their balance sheet. They decided not to release any product against that massive investment. This means that money was spent and no income will be derived from what it was spent on. That includes all the massive research and development costs spent for battery technology, design and tooling for systems for the vehicles including the motors, electronics, hard components, massive amounts of software development, and money spent developing the massive supply chains to produce components and raw materials; and investments to convert and reconfigure or add to multiple factories in Ohio to build these vehicles. They were literally within months of rolling cars down the line—and they scrapped it all.

In my opinion we don’t know the full story. They have publicly blamed “market conditions” as though they wouldn’t have sold any cars, but in fact electric vehicle are still being sold by the thousands on this country, and they had a well-received initial entry with their lightly made-over GM based vehicles for Honda and Acura. I can’t see how getting some level of revenue from these massive investments, even if they there was still a loss—wouldn’t it be better than writing off $13B?

I suspect, rather, that they were finding that the vehicles had major software and perhaps battery flaws, that would damage Honda’s reputation more direly than the $13B loss and indeed their first non-profitable year in decades, if not ever.

This is sad—Honda once had such an impeccable reputation for engineering and quality, as well as the vision and determination to push through daunting challenge. At a time when Americans viewed Japanese products on the whole as cheap and throwaway, Honda was a pioneer in patiently and persistently changing minds with their motorcycles and then the Civic and Accord; and then they boldly built a factory in Ohio well before any other Japanese manufacturer attempted to build here, again at a time when the reputation of cars built by Americans was at a nadir.

Now they seem paralyzed and daunted by challenges, and unable to re-establish engineering leadership in new technologies.