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Honda spends $A97b to go 100pc electric by 2040

‘We must build a strong EV brand and a strong EV business’, says Japanese car giant

21 May 2024

HONDA revealed “automobile” electrification initiatives that it will adopt through to 2040 at a recent business briefing in Tokyo with a keynote address from Honda Motor Company director, president and representative executive officer (Global CEO) Toshihiro Mibe.


The Japanese giant automaker took the opportunity to revealed plans to spend $A97 billion on EV development by 2031.


“Honda has not changed its belief that EVs are the most effective solution in the area of small mobility products such as motorcycles and automobiles, and Honda’s electrification target to make EVs and FCEVs represent 100 per cent of its global vehicle sales by 2040 remains unchanged,” said Mr Mibe.


“Honda must look ahead to the period of EV popularization and build a strong EV brand and a strong EV business foundation from a medium- to long-term perspective.”


The multi-faceted automotive (and aircraft) manufacturer plans to facilitate its electrification targets in a number of ways including through structural reform of procurement and production operations.


It says it will establish a vertically integrated EV value chain with a central focus on batteries that will potentially allow Honda to reduce their cost compared to the cost of current batteries procured in North America for example, by more than 20 per cent as of 2030.


It is also confident of securing enough batteries for the planned production of approximately two million EVs per year.


In a media statement emanating from the briefing Honda said it would establish a competitive business structure with an aim to reduce overall production cost by approximately 35 per cent.


Honda’s future EV line-up will be initially called the Honda 0 Series which will be the “flagship” of its EV range comprising a total of seven small through to large size models launched globally by 2030.


In striving to achieve this Honda is planning to invest approximately 10 trillion yen ($A95.8b) in resources over the 10-year period through to FY2031, which is when Honda is expecting the period of full-fledged popularization of EVs to start.


Honda says it will pursue both “bold” investments for future growth and shareholder returns.


In his address to the briefing, Mr Mibe said, “The environment surrounding automobile electrification is undergoing dramatic changes, and in some regions, the sense of a slowdown in EV market growth is gaining attention”.


“There are various approaches toward Honda’s 2050 goal of carbon neutrality,” he added.


“For example, to achieve ‘zero environmental impact’ in powering large mobility products such as aircraft and large watercraft, the use of SAF (aircraft) and e-fuel is being viewed as a high potential solution, from the perspective of range.


“On the other hand, Honda has not changed its belief that EVs are the most effective solution in the area of small mobility products such as motorcycles and automobiles. Looking at the trend from a longer-term perspective, Honda is confident that the EV shift will continue to proceed steadily. 


“Without getting too caught up in the current changes in the situation, Honda must look ahead to the period of EV popularisation, which will begin in the second half of the 2020s and build a strong EV brand and a strong EV business from a medium- to long-term perspective.”


From 2030, Honda plans to make EVs and FCEVs represent 40 per cent of its global auto sales, equating to some two million EVs. 


Honda says in future it will steadily pursue the introduction of attractive EVs “only Honda can offer”, the establishment of a comprehensive EV value chain with a central focus on batteries and the advancement of EV production technologies and facilities that it hopes will achieve a return on sales (ROS) of five per cent for its EV business as of 2030 to further increase its profit margin and make the BEV business self-sustaining.


In relation to Honda’s completely new 0 (Zero) Series EVs, some of which (Saloon and Space Hub) made an appearance at January’s Consumer Electronics Show in the US, the company says they will be developed using the philosophy of “Thin, Light, and Wise.”


The Saloon is due for launch in 2026. Technical details include the use of a newly developed compact e-Axle, an ultra-thin battery pack and “thin” motor room and floor.


Through the use of light body frames, new power units and F1 technology, Honda says it will be able to reduce the weight of its 0 Series EVs by approximately 100kg.


Heavy components such as the Flex Cell battery and power unit will be placed low and in the centre of the vehicle body to realize a low centre of gravity, resulting in improved stability in conjunction with a sporty drive feel.

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