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Honda plans huge $65 billion investment to build seven new electric vehicles

Honda is done sitting idly by while competitors like Tesla and BYD steal market share. To stay competitive, Honda is doubling its investment in electric vehicles to $65 billion (10 trillion yen) by 2030. Plans include a drastic cost reduction and the launch of seven new electric models.

Honda doubles investment in electric vehicles to $65 billion

CEO Toshihiro Mibe outlined the automaker’s new strategy on Thursday, saying Honda has not “changed its belief that electric vehicles are the most efficient solution.”

Honda believes it can compete in the small electric vehicle and motorcycle segment. In the long term, Honda believes that adoption of electric vehicles will continue to increase. The company wants to take advantage of the “electric vehicle popularization period” which will take place in the second half of the 2020s.

To achieve this, Honda will introduce new electric vehicles, establish a complete supply chain (including batteries), and advance electric vehicle technology and installations.

With its new strategy, Honda is targeting a 5% return on sales for its electric vehicle business in 2030, with the aim of making it self-sustaining.

Honda’s new 0 Series is expected to play a key role. Two new concepts, the Saloon and the Space-Hub, were unveiled at CES in January.

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Honda Saloon and Space-Hub concepts (Source: Honda)

The sedan is set to become Honda’s new flagship electric vehicle with a model very similar to the concept launched in 2026. It will first be launched in North America before its global rollout.

After the sedan, Honda plans to launch seven EV models globally, from smallest to largest. In China, Honda will launch ten new electric vehicles by 2027, accounting for 100% of auto sales in the region by 2035. It also unveiled its new “Ye Series” electric vehicles to take on Chinese automakers like BYD.

Honda will launch a series of smaller electric vehicles, starting with the N-Van e, a commercial mini-EV. After going on sale in Japan this fall, Honda will introduce a series of small electric vehicles in the region where it is needed. This will include personal mini-EV models in 2025.

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Honda Global CEO Toshihiro Mibe unveils the Honda 0 Series and new Saloon and Space-Hub concept models (Source: Honda)

Building an electric vehicle supply chain for the future

Regarding its supply chain, Honda will start by strengthening its partnerships for lithium-ion batteries while controlling costs. From mid-2020, Honda will start producing batteries with its JV partners.

In the United States, Honda’s joint venture factory with LG Energy Solution will start production with a battery capacity of up to 40 GWh per year. The lightweight and compact batteries will be used for its 0 series electric vehicles.

In the second half of the decade, Honda plans to further expand its battery business by creating a vertically integrated supply chain.

To achieve this, Honda will begin in-house production of GS Yuasa for EV batteries. Honda also plans to secure battery materials in Canada, such as cathode materials from POSCO Future M and separators from Kasei at the new joint venture factories.

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(Source: Honda)

By 2030, Honda aims to reduce the cost of electric vehicle batteries manufactured in North America by more than 20% compared to current costs. Honda already has enough guarantees to produce around 2 million electric vehicles planned for 2030.

Honda aims for electric vehicles and FCEVs to account for 40% of global auto sales in 2030 and 100% by 2040.

Electrek’s point of view

Despite the recent “electric vehicle slowdown” that the media continues to talk about, several automakers are now increasing their investments as they look to the future.

Honda is the latest to join Toyota, which has made a series of investments in new electric vehicles, including a large electric SUV for the United States and next-generation battery technology.

Although Japanese automakers have so far been lagging behind in the industry’s transition to electric vehicles, with the withdrawal of Ford, GM, VW and others, could they change the situation? That’s what Honda (and Toyota) are hoping for with new investments in electric vehicles.

Meanwhile, Honda and Toyota’s share of electric vehicle sales is currently much lower than that of their rivals. While Toyota’s share of electric vehicle sales is around 1%, many automakers are already achieving double-digit or even 100% electric vehicle sales.

Will the new investments be enough? Leave us a comment below to let us know your thoughts.

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News Source : electrek.co
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