Honda Is Buying Its Way Into EV Segment With $56 Billion and 30 Electric Models Globally by 2030

Honda Is Buying Its Way Into EV Segment With $56 Billion and 30 Electric Models Globally by 2030

Honda is done doing the mess-around with electric vehicles. Despite Japanese auto giants Honda, Toyota and Nissan dragging their feet with electric cars early on, the companies swear that EVs are a priority. Like, for realsies. So, not to be outdone by its rivals, Honda has committed $US40 ($56) billion for EV R&D through this decade.

The goal is to have 30 electric models by 2030, including one EV in the U.S. priced below $US30,000 ($41,646). I’m unsure why the theme at Honda is suddenly thirty and flirty, but if that’s what it takes to get cheap electric cars, count me in!

Honda CEO Toshihiro Mibe says the company will move fast, but I’m sceptical; it’s a big lift! The thing is, Honda won’t be lifting alone, as Bloomberg reports:

Another of [Toshihiro] Mibe’s pushes has been around changing Honda’s long-standing go-it-alone strategy when it comes to developing and selling EVs. Mibe hinted at as much in his first briefing after being promoted to the top role in February last year, saying as Honda pivots toward EVs, “time is of the essence and I would opt to use alliances and external insight to accelerate our shift.”

Last month, Honda announced it’s joining forces with tech giant Sony Group Corp. to develop EVs slated to go on sale starting in 2025. And earlier this month, Honda and General Motors Co. expanded their existing tie-up with plans to jointly develop affordable EVs in major global markets. The duo plan to introduce their first model — with a starting price below $US30,000 ($41,646) — in North America in 2027.

The alliances Honda has steadily built are surprising, but it’s not clear if they’re pleasant or unpleasant surprises. What is clear is that Honda stands little chance without help. Sony will bring software expertise, while GM’s Ultium batteries will power two possible EV SUVs from Honda and Acura for the U.S. market.

Honda Is Buying Its Way Into EV Segment With $56 Billion and 30 Electric Models Globally by 2030Image: Honda

Not long ago, Honda would’ve scoffed at strategic alliances. That’s changing now that Honda realised EVs require a broad skill set and raw materials that Japan will be unable to source domestically. That’s probably a big reason Honda is still looking for partners in battery production and solid-state development besides just General Motors. You can’t put all your cells in one basket.

Honda claims it’ll use its many alliances to bring prices down, per Bloomberg:

A major reason for pursuing such partnerships is cost savings. Along with GM, Honda is seeking to bring EV costs down to an extent that they reach price-parity with gasoline-powered cars.

“Once we’ve achieved large volumes of millions of EVs, we’ll be able to drastically reduce costs,” Mibe said.

But that could be Honda hedging against bad partnerships. I’m not even sure price parity with ICE is a thing anymore. Not really. I’d love that it were, but we’ve been burned before.

Tesla has strung us along with the promise of affordable electric cars — and also unaffordable models — but we’ve yet to see it. As Erik Shilling said yesterday, the proof will be in the pudding. The snack pack being pricing, because a truly cheap Honda EV in the U.S. sounds sweet. Cheap first, sporty later.

Honda Is Buying Its Way Into EV Segment With $56 Billion and 30 Electric Models Globally by 2030Image: Honda