Japan’s Honda Motor Co Ltd has unveiled plans to spend $64 billion on research and development over the next decade, laying out an ambitious target to roll out 30 electric vehicle models globally by 2030.
According to the company, its goals include producing some 2 million electric vehicles a year by 2030, aiming to gain a share in the fast-growing market for electric vehicles, led by Tesla Inc, while Japanese automakers risk falling behind European and U.S. rivals.
“As far as resource investments over the next 10 years go, we’re going to invest about 8 trillion yen in research and development expenses,” said Honda Chief Executive, Toshihiro Mibe, referring to the equivalent of $64 billion.
Honda noted that it wanted to establish a dedicated electric vehicle production line in North America, where it will also procure Ultium batteries from General Motors Co. It is also considering a separate joint venture company for battery production there, aside from its GM partnership.
Honda indicated that GM would develop a series of lower-priced electric vehicles based on a new joint platform, expanding on plans for GM to begin building two electric SUVs for Honda starting in 2024.
Christopher Richter, an analyst at Honda indicated that the push towards electric vehicles has prompted it to hunt for partners to optimize costs and share technology.
“This puts them in good company with a lot of other makers that have made big battery announcements… ultimately the world is going to leave internal combustion engines behind. Given their size, I am glad they are cooperating with General Motors.”
Christopher Richter
The bulk of the 8-trillion-yen investment is earmarked for electrification and software technologies. That includes about 43 billion yen on a demonstration line for the production of solid-state batteries, targeted to start in spring 2024.
Hybrid ‘Weapon’
Honda and other Japanese automakers have long said that even as they go electric, they will not give up on older, hybrid technology.
Proponents of hybrids point to the 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, We will develop our current hybrids and use them as a weapon in our business,” Mibe said during the presentation.
Honda’s plan to make 2 million EVs annually was within expectations, said analyst Seiji Sugiura of Tokai Tokyo Research Institute.
This is because Toyota Motor Corp has already targeted sales of 3.5 million such vehicles by 2030 and Nissan Motor Co has aims for half its cars to be electric by the end of the decade. Just a year into the job, Honda Boss, Mibe, has already made a number of bold pronouncements.
In March, the company said it would team with Sony Corp to develop and sell electric vehicles, aiming to start selling the first model in 2025. Last year, he unveiled a 2040 target for electric and fuel cell vehicles to make up all of the global sales.
