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Honda to invest $40 billion in EVs and $340 million in solid-state batteries, but will rely on hybrids well into 2030s

Honda to invest $40 billion in EVs and $340 million in solid-state batteries, but will rely on hybrids well into 2030s

Honda CEO Toshihiro Mibe really started getting up and smelling EV coffee lately, making several big announcements in 2022 related to electrification expansion. In its latest news, Honda plans to invest about $40 billion over the next decade to deliver 30 BEVs worldwide. Despite this effort and the additional money allocated to developing solid-state batteries, Honda still loves hybrid vehicles and plans to continue promoting them.

Honda Motor Co., Ltd. is an old automaker that has joined its competitors in sharing goals to expand electrification and strive to achieve 100% electric sales by 2040. With companies like Honda, it is important to note the semantics used in the industry, where there is a huge difference between ” electrified” and “pure electric”. Much of Honda’s electrification strategy still includes hydrogen fuel cell vehicles (HFCVs) and hybrids.

In terms of 100% battery electric cars, Honda remains less overtly committed than a lot of industries…well maybe not Toyota. It appears that just a few months ago Honda wasn’t committed to expanding its electric car offering in the US beyond hybrid cars due to “customer insufficiency”…because it was.

Despite previous skepticism about prospective sales, Honda plans to bring its “first-volume BEV,” based on General Motors’ Ultium electric platform, as well as an Acura SUV, to the United States in 2024. However, the company will commit Honda only offered an annual version with a capacity of 70,000 units for these two EVs combined.

Speaking of GM, Honda has become more comfortable with the American automaker by recently announcing additional plans to “co-develop a series of affordable electric vehicles” by 2027. We’ve learned recently that expanded relationships with the likes of GM and new partnerships with Companies like Sony, for example, are part of a larger electrification strategy than Honda, which is opening up its portfolio to ensure it can meet 2030 and 2040 standards.

Honda hyrbid
Honda e – Honda BEV’s only offer for Europe and Japan only / Source: Honda Motor Co.

Honda is throwing big money on electric cars, not giving up on hybrids

According to a report by Car NewsHonda is investing 5 trillion yen ($39.91 billion) to support its previously defined electrification strategy, which includes 30 BEVs and expanded production capacity of 2 million EVs annually by 2030.

In addition, the Japanese automaker will change its business strategy in favor of frequent sales of services that combine hardware and software, part of the e:Architecture slated for launch in 2026 as part of Honda’s new e:N brand that was announced last October.

Honda CEO Toshihiro Mibe recently detailed a multifaceted approach to achieving the company’s goal of offering a gasoline-free range by 2040. To start, Honda plans to continue working with partners like General Motors to reach scalability and reduce costs. At the same time, it will develop its own in-house technologies that will eventually take over the automaker’s long-term responsibility. Mibe speaking:

From 2030 onwards, we believe we will enter the full promotion period, and battery electric vehicles will become commonplace. We will have small, medium and large scale platforms and cover all sectors with these three platforms.

While it’s encouraging to see such consistent ambition (better late than never), Honda will need to overhaul its entire automotive business to adapt to the ever-growing world of electric vehicles. Although the automaker sells nearly 4.5 million vehicles globally annually, it sold only 32,649 BEVs. Start, starting with the Honda EV Plus in 1997. That doesn’t mean Honda EVs aren’t gaining momentum though. Almost half of that cumulative total (14,324 units) was sold in 2021 alone.

Much of Honda’s “electrified” sales are still in hybrids like the Accord and the CRV. To reach critical mass in the shift toward an all-electric future, Honda is promising, and it’s determined that hybrid vehicles will continue to drive sales well into the 2030s, particularly in areas like the US Midwest that may be slower to adapt to electric vehicles. Mibe shared his thoughts again:

We will continue to rely on hybrid cars as one of our most powerful weapons.

Honda adds solid state batteries to its research and development task list

In addition to the big money producing electric cars, Honda has participated in an additional investment of 43 billion yen ($343.2 million) to develop a pilot line for producing solid-state batteries two years from now. After development in 2024, Honda believes it can bring more energy-dense solid-state batteries to the market toward the end of the decade.

This timeline would be on par with Honda’s strategy to begin increasing global electric vehicle sales in 2030. An electric vehicle with solid-state batteries will certainly help improve the situation for consumers, but there is a reasonable opportunity for other automakers to offer solid electric vehicles. long before that.

Take Electric

Hey Honda, what an exciting relationship we share. The automaker has taken a lot of fickleness from us in the past for its lack of momentum toward battery-powered cars — a gap it has since begun trying to work its way out of.

$40 billion should definitely help, but you can’t buy time, and Honda has a lot of catching up to do. The news coming out of Honda’s press room has been a lot more promising so far this year, and we applaud the automaker for changing its heart. Its electrification strategy makes sense given its current business model and the amount of Honda sales of hybrid cars, so we don’t necessarily mean to knock it down.

The potential problem is that Honda is betting heavily that the global market won’t really be interested in electric cars for a decade from now. That may be true, but the growing adoption of electric vehicles combined with the extraordinary number of new, affordable BEV options in the pipeline could say otherwise.

Will people continue to buy hybrid cars in 2035 as Honda says? Will Honda have enough of a BEV presence this decade to remain relevant? Have you already read that far? These are tough questions, what do you think?

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