Honda Doubles Investment in Electric Vehicles to $65 Billion, Plans 7 New Models | Car Scoops - Latest Global News

Honda Doubles Investment in Electric Vehicles to $65 Billion, Plans 7 New Models | Car Scoops

Honda says it still believes in an all-electric future, despite a slowdown in electric car sales in the West

                                        https://www.carscoops.com/author/sam-d-smith/                                    

from Sam D Smith

May 16, 2024 at 7:26 p.m

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

  • Honda is committed to phasing out gasoline engines by 2040 and is doubling its investment.
  • The Japanese automaker will vertically integrate electric vehicle production and bring aspects such as battery manufacturing in-house.
  • Seven new electric vehicles are scheduled to launch in North America before 2030.

Honda announced its Series 0 electric cars back in January and used this year’s CES in Las Vegas to unveil two new models. Now CEO Toshihiro Mibe says the automaker will double its investments in electrification, although there are signs that electric vehicle sales in the U.S. and Europe appear to have cooled for now.

The move is a strong statement of intent from Honda, which believes electric vehicles offer the most effective solution for the future of automotive and motorcycle applications. Their timeline for transitioning to pure electric vehicles, both battery and fuel cell electric, remains the same, with a deadline of 2040 for small vehicles. However, Mibe hinted at the use of sustainable fuels for larger applications such as aviation and shipping.

More: Honda’s Wedge-Tastic sedan concept hints at a production electric vehicle in 2026

The main goal of the investment, which will rise to 10 trillion yen ($65 billion) by 2031, is to reduce battery procurement costs in North America by 20 percent and overall production costs by 35 percent. To achieve this, Honda says it will switch to producing batteries in-house.

While battery manufacturing is the largest component, the company will also source raw materials and expand its support to reuse and recycling to build a vertically integrated electric vehicle value chain. The goal is also to develop software development internally. Another advancement in production will be Honda’s version of Tesla’s Gigacasting, which they call Megacasting.

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

“We need to have this internally, not only to ensure stable supply, but also to reduce costs and further develop battery performance,” Mibe said AutoNews. “We need money for that. We are able to raise enough cash and that is why we announced this 10 trillion yen number today.”

And it’s not a small number for Honda either. The new 10 trillion yen ($65 billion) investment in electric vehicles was not only revised upward by double the original plan, but is also huge considering the company’s most recent annual profit was just 1.12 trillion yen (US$7 billion).

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

The move appears to be a direct response to Chinese electric vehicle makers, who have long had the upper hand in controlling costs. BYD, for example, produces its own batteries and has strict control over its supply chain. This is just one reason why the company can offer its models cheaper than the competition.

See also: Honda takes on BYD with new Ye EV brand, shows off SUVs and a GT concept

In the short term, Honda will continue to focus on its successful hybrids. The company will release two new versions of the e:HEV system and introduce e-AWD using engines from its current electric vehicles. The company expects sales of hybrid vehicles to peak in 2029 or 2030, with gasoline engines phasing out around 2040.

Almost half of all new Hondas will be electric or FCEVs by 2040

The medium to long-term outlook is for Honda to equip 40 percent of its range with electric or FCEV powertrains by the end of the decade. The 0 Series will make this possible with seven models scheduled to launch by 2030, with North America receiving its first electric sedan in 2026. A mid-size SUV and an entry-level SUV will follow, before a new three-row “large” EV SUV arrives in 2027.

Each 0-Series car will be 220 lbs (100 kg) lighter than the manufacturer’s current electric vehicles and have a range of more than 300 miles, according to EPA testing.

In addition, ten new models will be launched in China by 2027 as part of the company’s newly announced Ye series. Small models in the Kei category will be introduced to the Japanese domestic market, starting with the “N-VAN e:”, which will be available for purchase in the fall, and an electric motorcycle with a removable battery.

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

    Honda doubles investment in electric vehicles to $65 billion and plans seven new models

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