General Motors and Honda announced on April 2, 2020 that Honda’s next generation of electric vehicles (EVs) will be jointly developed by the two companies, but will be “based on GM’s highly flexible global EV platform” and powered by the Ultium lithium-ion battery design that GM recently revealed. Honda will execute exterior design and interiors of two Honda-badged EVs and said in a statement that “the platform will be engineered to support Honda’s driving character.” Sales of the Honda EVs are slated to begin in 2024.
Additionally, the companies confirmed that Honda plans to "make GM’s hands-free advanced driver-assist technology available." That system currently is marketed by GM as Super Cruise.
The announcement was not wholly unexpected. The two companies have an extensive history of technology-sharing agreements and currently are jointly involved in research and development of hydrogen fuel-cell systems. And in recent months, various Honda executives affirmed the company’s reluctance to heavily commit to EVs for the U.S. market as American consumers continue to prefer large pickup trucks and SUVs and vehicle charging infrastructure remains immature.
Honda confirmed in early March that it would no longer sell the EV variant of its Clarity sedan in the U.S. It earlier said that despite widespread European acclaim for its just-released Honda E compact EV, it does not intend to offer the Honda E in the U.S. market, so the collaboration with GM presumably will give Honda the ability to sell EVs with comparatively minimal investment – or risk.
“This collaboration will put together the strength of both companies, while combined scale and manufacturing efficiencies will ultimately provide greater value to customers,” said Rick Schostek, executive vice president of American Honda Motor Co., Inc., in a statement. “This expanded partnership will unlock economies of scale to accelerate our electrification roadmap and advance our industry-leading efforts to reduce greenhouse gas emissions.”
Profitability in the driver’s seat
Manufacturing scale often is mentioned as vital to laying the foundation of volume EV sales in the U.S. market. Without scale that can reduce manufacturing costs, many automakers are wary of committing to EVs that cost markedly more than internal-combustion-powered equivalents. That is why GM president Mark Reuss raised eyebrows early in 2020 when he insisted that the company’s Detroit-Hamtramck assembly plant – GM’s first plant fully dedicated to production of EVs – will be profitable from the start.
The two companies confirmed in the initial announcement that “will be manufactured at GM plants in North America,” but did not specifically name the Detroit-Hamtramck plant as the likely site for the manufacture of the Honda EVs. Sales are expected to begin in 2024 model year.
In a statement, Doug Parks, GM executive vice president of Global Product Development, Purchasing and Supply Chain, said the GM-Honda teamup “is another step on our journey to an all-electric future and delivering a profitable EV business through increased scale and capacity utilization. We have a terrific history of working closely with Honda and this new collaboration builds on our relationship and like-minded objectives.”
One cryptic statement in the release is likely to generate extensive speculation: “We are in discussions with one another regarding the possibility of further extending our partnership,” said Honda’s Schostek. One critical element for the Detroit Three automakers is the need to capably merge EV propulsion within the packaging of fullsize pickups, the Detroit automakers’ chief profit machines. Reuss confirmed that GM intends to begin building its first battery-electric pickups in 2021 and could be studying avenues to generate maximum early demand.Continue reading »