Honda Motors to invest $40 billion into electrification

by Apr 15, 2022

Honda recently stated its carbon neutrality goals, setting 2040 as the company’s target for a completely gasoline-free sales portfolio. In order to reach this target year, Honda Motors has decided to invest a total of $39.91 billion over the next ten years for its electrification strategy. This strategy will also include the production and distribution of 30 fully electric vehicles in the global commercial and passenger vehicle market, extending electric vehicle production capacities to a staggering 2 million EVs annually by 2030.

The company has also stated that it will shift its business away from non-recurring hardware sales toward recurring sales of services that combine hardware and software. This transition is part of new software-defined EV platform, dubbed “e:Architecture”, that Honda Motors will launch in 2026 to underpin the next generation of large-sized battery electric cars from Honda. The company has stated that the $40 billion being invested is around 65% of total R&D budget that is to be allotted to Honda till 2030, which is a testament towards expressing its dedication towards actively moving towards electrification.

In addition to electric vehicles and investment in software, Honda has also stated investments amounting to $343.2 million to open a demonstration line for producing next-generation solid-state batteries in the spring of 2024. Honda will, however, keep sourcing Ultium Lithium ion batteries from General Motors, while also exploring other joint ventures for battery production locally in North America. In China, Honda will partner with CATL, and in the home market of Japan, it will get batteries for a new series of mini-EVs from Envision AESC, the battery maker that also supplies rival Nissan Motor. Honda will also be investing in swappable batteries during its electrification trajectory. Honda has announced earlier that it will be co-developing budget friendly EVs with General Motors in 2027, and with Sony Corp. in 2025.

The 2 million EV production capacity represents ~40% of total production sales that the company has planned for 2030. In terms of EV offerings, Honda sees three platforms ahead in the near term. One platform will be a mini and subcompact EV platform developed for Japan and Asia. In Honda’s home market, it will debut as a commercial mini vehicles. The other is a midsize EV platform being jointly developed with GM. The third is the in-house e:Architecture framework, which will underpin larger vehicles, especially those for North America and China. Of the 30 EVs Honda plans to launch by 2030, 10 will debut in China through 2027.

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