Honda, GM nix plan to partner on affordable EVs
Eighteen months after announcing its intent to build “affordable,” sub-$30K EVs that would go on sale in 2027, Honda and GM have scrapped the plan. “GM and Honda will search for a solution separately,” Honda CEO Toshihiro Mibe told Bloomberg TV. “This project itself has been canceled.”
According to Honda’s Q3 report, the Prologue and the ZDX, electric SUVs based on GM’s Ultium battery tech, are still slated to go on sale in North America as of early 2024.
Instead of a Nissan Leaf or Tesla Model 3 competitor, Honda will serve up “a mid- to large-sized EV” on a new, “EV-specific” architecture. It is scheduled to launch here in 2025, most likely assembled in Ohio, at one of Honda’s existing plants, with a battery pack built in North America by LG, for those good ol’ federal tax credits. (It’s all in the report, a PDF of which is linked in this press release.)
The decision underscores the popularity of the midsized SUV in America and the difficulty of making an EV to match up against, say, a base Honda Civic in price. (MSRP plus destination said Civic is $25,045.)
GM’s recent decision to delay full-volume production of its upcoming EVs—Equinox, Sierra, and Silverado—reflects similar market priorities: It’s easier to make money off a $50K or $60K EV than a $30K one.
What’s the reason for the failed partnership? Bloomberg reports that Honda’s CEO cited cost. The official statement insists the decision was mutual and that, of course, both companies remain committed to affordability in the EV market. However, GM’s production delay and the references to “swift decision-making” in Honda’s Q3 report suggest that the Japanese automaker may have grown impatient. Honda has proven it can get along with GM and has probably developed its understanding of battery technology and manufacturing along the way. We’d also wager GM’s current labor negotiations with the UAW are contributing to Honda’s uncertainty.
It isn’t cutting all ties with GM, however: yesterday, at the Japan Mobility Show, Honda CEO Toshihiro Mibe announced that, “Together with GM and Cruise, Honda is planning to launch a driverless ridehail service using the Cruise Origin, in Japan in early 2026.” Yup, the same Cruise that just got its autonomous vehicle testing permit yanked by the state of California, citing “unreasonable risk to public safety.”
Honda holds to its medium-term goal of producing 2M electric vehicles annually by 2030.
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Since Covid hit and the economy tanking it has hit the lowering of battery costs.
Now unions want in at Battery plants only will drive up cost even more.
GM has been moving to do EV development but are trying to keep ICE alive. They are making a new V8 for the trucks on top of the new Corvette Turbo.
If you watch Mary is speaking up and putting pressure on Biden and the election.
They are looking for a break by the EPA on EV time line and emissions. They may get that but the CARB states will likely not help.
The planet is not going to die any time soon and for the sake of the companies and consumers they need to back off.
Other mfgs are moving to this too.
Sometimes both sides are right: it could be true that climate change is a dire and immediate problem, and also be true that solving it will require more drastic changes and economic impacts than we can (or at least are willing to) bear. And as a side note, another two-part thought: it seems to me that EV definitely isn’t ready for prime time, but auto manufacturers are money anxious to sell them as fast as possible – cars that are as unreliable, unfixable, and easily obsolesced as cell phones? What a revenue bonanza!
So affordable EV’s are still just a dream. Who can afford these things?