Like every traditional automaker, Honda is looking down the road and seeing an end to sales of good old fashioned gasoline-powered cars. All of them can see a Kodak/Nokia moment coming, sort of like dinosaurs looking heavenward and seeing a mile wide comet streaking their way.
This week, Honda CEO Toshihiro Mibe revealed his company’s future plans, which call for launching 30 electric car models between now and 2030, with a target of 2 million sales a year by then. To get there, the company is preparing to drop a $64 billion wad of cash on a number of investments designed to keep it competitive in the coming EV Age.
$40 billion of that total will be spent on electrification over the next 10 years. That includes expanding Honda’s own EV platforms, but some of it will be spent to create new growth opportunities in space exploration, eVTOLs, avatar robots, and more. The company is also planning to spend an additional $80 million a year on startups that could help expand its business and shift from selling products alone to offering combined solutions. Mibe said Honda will also actively pursue inter-industry collaboration and alliances like the ones it announced recently with General Motors and Sony.
Hybrids Are Part Of The Honda Strategy
Last June, Honda said it would phase out gasoline-powered cars completely by 2040. As Reuters reports, Honda and other Japanese automakers have said all along they will not give up on hybrid technology even as they transition to making battery-electric cars. Proponents of hybrids claim there are many markets, especially in emerging countries, where the infrastructure to support battery-electric vehicles will be a long time coming.
“By no means is this the end of hybrids and the replacement of all hybrids with EVs,” Mibe told the presentation. “We will develop our current hybrids and use them as a weapon in our business.”
But Wait, There’s More
As part of his presentation, Mibe said Honda is planning to introduce a cheap mini-EV model for commercial use in Japan that will sell for around $8,000. That vehicle is expected to go on sale in 2024. Honda is offering this car for commercial use first because Japan lacks the charging infrastructure needed to roll out wide scale EV deployment, said Mibe. After that, Honda will start to roll out personal use mini-EVs and EV SUVs, he added.
Honda also plans to introduce two mid to large size EVs — a Honda Prologue SUV and an Acura SUV — which are currently being developed with General Motors at prices that are supposed to be cost competitive with ICE vehicles. It has struck a deal to build some electric cars at the GM factory in Spring Hill, Tennessee, but Mibe said in his remarks that his company is also considering the construction of a dedicated EV production line in North America. On its website, Honda says, “A new era of electrified Honda vehicles is coming. It starts with the fully electric 2024 Honda Prologue SUV, offering versatility and driving range on par with our current lineup of rugged SUVs.”
In addition, Mibe doubled down on Honda’s previous commitment to launch 10 new EV models in China under its e:N Series by 2027, with two models available to customers this year. It is planning to build a dedicated EV plant in Guagzhou and Wuhan to support production in one of its most important markets.
Lastly, Mibe said Honda will launch two electric sports models — one of them a halo car for the company’s EV efforts by mid-decade. Car and Driver says one is swoopy and low slung like an electric version of the Acura NSX. (See the featured image for this story above.) The second appears to be slightly higher car with more of the long hood/short deck look that has defined sporty cars since the original Mustang broke cover in 1964.
Honda used to make a 2-seat roadster called the S2000 that was a dandy track day car in the idiom of the BMW Z3, Porsche Boxster, and Mazda MX5/Miata. Could this other car be a battery-powered reincarnation of the S2000? If so, that would be great news for sports car fans everywhere. The car might not be a convertible, though. The concept under that cover looks a lot like a Porsche Cayman, the hardtop version of the Boxster. Interestingly enough, Porsche says it has battery-electric version of both cars in the works.
Honda e: Architecture
TechCrunch reports that while Honda will utilize GM’s Ultium architecture and EV platform for some electric models, it fully intends to chart its own course as well. The Honda e: Architecture, which the company plans to introduce in 2026, will be an EV platform that includes both a hardware and cloud connected software layer.
Like many other automakers, Honda sees the potential for software defined vehicles to help bring in recurring revenue through third party applications. To make that happen, it will build an application layer which can be continuously updated over the air on top of the vehicle operating system, Mibe said.
Potential Battery Joint Venture
Honda said it is exploring the possibility of creating a North American joint venture for battery production outside its partnership with GM, but did not elaborate. Its goal is to ensure stable procurement of lithium-ion batteries in North America as well as in China and Japan. It plans to strengthen its existing collaboration with CATL in China and to procure batteries for its mini EVs from Envision AESC in Japan.
To accelerate its independent battery R&D for solid-state batteries, Honda is investing about $343 million into building a demonstration line. This is similar to what Nissan and NASA are doing together. Honda hopes it will begin production by spring 2024 and use those next generation batteries in models to be introduced after 2025.
The news this week from Honda is a bit shocking, to be honest. Here is a company that has done next to nothing to embrace the EV revolution. Now it is suddenly rushing off in a dozen different directions — a partnership with GM, a new battery factory, new battery technology, new electric sports cars, new this, new that. It’s wonderful that it has finally awakened from its torpor, but is there a hint of desperation here? There’s a lot of singing and dancing going on, but no products as of yet.
This isn’t meant to be critical of Honda. All credit to the company for taking bold new initiatives. But there are going to be legacy automakers who don’t survive the EV revolution. One gets the impression Honda may have left things a little too late before it decided to put its shoulder to the wheel and move the transition to electric cars forward.
Its latest effort is the Honda e, which by all accounts is a terrific urban car with lots of geewizardry baked in, but it costs too much for its limited range and has been something of a disappointment in the sales department. How many chances will it have to get the EV game right?
Finally, there’s this. The announcement about its new e: Architecture should be a warning to all of us who peer through our telescopes for a glimpse of the future. Every automaker is looking to leverage additional profits after the sale from subscription services. Rivian let the cat out of the bag when it said last year it expects its customers to pony up an additional $15,500 per vehicle in after sales revenue over the life of their cars. The whole “car as computer on wheels” thing that Tesla started may have a surprise in store — a stinger in the tail designed to extract more money from owners over and above the original purchase price.
Recently, we did a story asking readers whether they would prefer a smart car that does all sorts of marvelous things or a dumb car that drives from Point A to Point B and back again reliably and comfortably for many years — sort of like the Honda Civic, come to think of it. We think there could be a market for simple cars that cost less and deliver reliable transportation. Will the industry give them to us? “We’ll see,” said the Zen master.
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