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Honda Logo On Grille Of Car© Vyacheslav Bukhal Dreamstime

Honda to Ramp EV Spending to $40 Billion

April 13, 2022
The Japanese automaker outlined a strategy Tuesday involving initial reliance on external partnerships for the first half of the 2020s.

Honda Motors is the latest automaker to pledge big moves for electric-only vehicles. Pivoting from the company’s previous focus on battery-electric hybrid vehicles, Honda announced April 12 it would launch 30 models of electric vehicle globally by 2030. The Japanese automaker also said it would allocate five trillion yen, or about $40 billion, on electric vehicles over the next ten years. That’s out of eight trillion yen (about $64 billion USD) dedicated to the company’s entire R&D expenses.

Tuesday’s announcement saw Honda lay out a timeline of the company’s planned progress towards its stated goal, set last year, of selling exclusively electric and fuel-cell powered vehicles by 2040.

First, in the near-term future, Honda says it will begin ramping up its electric battery production by leveraging partnerships with other companies, including Ultium batteries from General Motors in North America and CATL and Envision AESC in China and Japan, respectively. Honda is also currently “exploring the possibility of creating a joint venture company for battery production,” which would be similar to the arrangement General Motors made with LG Energy Solution to form Ultium LLC.

The second half of the 2020s will see Honda begin its own battery production as it releases electric vehicles from those partnerships, including two EV models currently under development with General Motors, both mid- to large-size electric SUVs. GM and Honda announced that collaboration earlier this month.

Then, by 2026, Honda hopes to adopt a proprietary architecture for all its electric vehicles, combining its hardware and software platforms. By the following year, the company then aims to introduce its EVs to North America at a price range competitive with gas-powered vehicles. By the end of the decade in 2030, Honda hopes to realize a production target of more than 2 million electric-vehicle annual units.

The $40 billion earmarked for EV R&D will be split into electrification and software, as well as investment in “startups with high-potential advanced technologies and business models.”

“Honda is committed to reaching our goal of carbon neutrality on a global basis by 2050, which requires driving down the cost of electric vehicles to make EV ownership possible for the greatest number of customers, said Honda CEO Toshihiro Mibe in a statement on his company’s partnership with General Motors.

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