Disappointing Honda e Sales Prompt Move To Jump Into Tesla EV Credit Pool

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The Honda e and the Renault Zoe are two similar cars. Both are battery electric compact cars with sticker prices just north of $30,000. Sales of the Zoe are soaring. CleanTechnca’s Maarten Vinkhuyzen bought one recently and loves his car. Lots of other Europeans are doing the same, making the Zoe one of the hottest selling electric cars in Europe. The Honda e, on the other hand, is languishing in Honda’s European showrooms. So far this year, only 1000 people have raised their hand to say, “I want one of those,” according to the European Electric Car Report.

Honda e
Courtesy of Honda

That’s a problem. You see, the Honda e was supposed to be the car that allowed the company to avoid substantial fines if its corporate average emissions in Europe exceeded 95 grams of carbon dioxide per kilometer. As Maarten reported in January, the current average for passenger cars in Europe is 125 grams per kilometer. Under the current EU rules, the fine for exceeding the maximum limit would amount be €2,375 per car sold. Multiply that by a few million cars and you have a recipe for massive heartburn in corporate boardrooms all across Europe.

Honda has only a tiny presence in Europe with a market share of just 1%. But after speaking directly with officials from the company, Maarten reported the company had absolutely no intention of paying any fines at all. The Honda e was supposed to take care of that but the fact is, it didn’t. If Honda can’t sell them, they are going to have to pay the fines.

That reality has forced Honda to do what FCA did recently — join Tesla’s zero emissions credit pool. It’s simply cheaper to pay Tesla that to pay the fines. This is a stalling tactic pure and simple until Honda decides how to comply with the regulations. That will likely involve more hybrids and more plug-in hybrids but it will also involve making battery electric cars that are attractive to potential buyers.

Everyone admits the Honda e is a stunning car, an engineering tour de force from Team Honda. What, then, explains its lackluster sales? Range. The similarly priced Renault Zoe can go about 100 miles further on a single battery charge than the Honda e. That is not a trifling difference, it’s a deal breaker for many folks. There are plenty of manufacturers who are focused on building cheap city cars for drivers who only drive a few miles a day. The Honda e either needs to cost less money — make that a lot less money — or it needs more range — make that a lot more range. A larger battery is supposedly in the works.

Digital geewizardy is all well and good, but value for money is still the key metric in the marketplace. Honda is like the baseball player who wins the home run derby but can’t run the bases, field the baseball, or hit with runners in scoring position. It needs a strategy that will make it relevant to the EV revolution and it needs it now. So far, what that strategy might be is far from clear.

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Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."

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