Subaru FY2025 Revenue Rises Despite Sharp Profit Decline and BEV Strategy Shift

Subaru announced on May 15, 2026, that its consolidated revenue for FY2025, covering the period from April 1, 2025 to March 31, 2026, increased by 2.1% year-over-year to JPY 4.8 trillion. Despite the revenue growth, the automaker reported a major decline in profitability due to tariff impacts, environmental-related expenses, and increased BEV investments. Operating profit fell by 90.1% YoY to JPY 40.1 billion, while profit attributable to owners of parent declined by 73.1% to JPY 90.8 billion.

The company stated that operating profit decreased by JPY 365.2 billion during the fiscal year. Positive contributions of JPY 75.5 billion from sales activities and cost reduction measures were outweighed by several negative business factors. Additional U.S. tariffs and changing market conditions resulted in a negative impact of JPY 289.3 billion, while manufacturing-related activities contributed another JPY 50.3 billion decline. Other factors accounted for a JPY 101.1 billion reduction, including costs linked to environmental regulatory credits and BEV-related expenses totaling JPY 57.8 billion.

Subaru FY2025 Financial Performance Overview

The company’s global consolidated unit sales declined by 4.3% year-over-year to 896 thousand units in FY2025. However, Japan-based Subaru expects a recovery in FY2026 supported by higher sales volumes and operational improvements. The automaker forecasts global consolidated unit sales of 940 thousand units in FY2026, representing a 4.9% increase compared to the previous fiscal year. North American sales are expected to increase by 28 thousand units to reach 736 thousand units.

Subaru FY2025 and FY2026 Financial Comparison

The following table highlights Subaru’s key financial and sales indicators for FY2025 and its FY2026 forecast.

BEV Production and Strategic Investment Adjustments

Subaru confirmed that battery electric vehicle production began at the Yajima Plant in February 2026. The facility is expected to begin mixed production of BEVs and ICE vehicles from around summer 2026, with gradual increases in utilization rates. The move is part of Subaru’s broader effort to optimize production flexibility while responding to changing market demand and regulatory pressures.

For FY2026, Subaru forecasts consolidated revenue of JPY 5.2 trillion, representing an 8.7% increase year-over-year. Operating profit is expected to rise significantly to JPY 150 billion, while profit attributable to owners of parent is projected to increase by 43.1% to JPY 130 billion. The company expects reduced tariff impacts and lower environmental-related expenses to support earnings recovery. However, it also warned of downside risks exceeding JPY 130 billion due to rising raw material costs, precious metals market volatility, and geopolitical uncertainty linked to the Middle East situation.

As part of its long-term growth investment strategy, Subaru has decided to postpone the launch timing of its in-house developed BEVs. The company stated that resources initially allocated to those projects have now been redirected toward ICE and HEV model development. This adjustment reflects Subaru’s effort to balance electrification investments with profitability and market demand conditions.

Frequently Asked Questions

Why did Subaru’s operating profit decline sharply in FY2025?
Subaru’s operating profit declined mainly because of higher U.S. tariffs, environmental regulatory expenses, manufacturing-related costs, and increased BEV-related investments. While the company achieved positive impacts from sales activities and cost reduction measures, these gains were offset by broader business environment challenges and additional operational expenses. BEV-related expenses alone accounted for JPY 57.8 billion, while tariff and market condition impacts reduced profitability significantly during the fiscal year.

What changes did Subaru make to its BEV strategy?
Subaru postponed the planned introduction timeline for its in-house developed battery electric vehicles as part of its revised growth investment strategy. Instead of accelerating BEV deployment, the company decided to redirect resources toward internal combustion engine and hybrid electric vehicle development. Subaru also started BEV production at the Yajima Plant and plans mixed BEV and ICE production from summer 2026 to improve manufacturing flexibility and respond more effectively to evolving market demand.