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Honda CEO Bets $40 Billion to Reach Full Electrification

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Japanese automakers, as the world knows, have some sort of allergy from electric vehicles. According to a research report released by climate think tank InfluenceMap, Japanese carmakers are least prepared for a zero-emissions vehicle transition compared with their global competitors.

Related: Japan Could Lose 14% GDP & Millions of Jobs by Stalling on EVs

Leading Japanese auto giant Toyota has been most vocal against the transition towards electric vehicles. Its often criticized for spreading misinformation & propaganda about EVs, lobbying governments, and manipulating policies to favor its hybrid tech in place of EVs. Honda, which is Japan’s second-largest company, has historically not been much better than Toyota in this respect, but the company does seem to be waking up and saying some of the right things under its new CEO Toshihiro Mibe.

Toshihiro Mibe 2

Mibe is known as a person with new thinking, letting go of the old recipes and is willing to embrace future in a better way than his other Japanese counterparts. When he took over as Honda’s Chief Executive Officer last year, he did so with a bang, promising to achieve carbon neutrality by 2050 and phase out gasoline-powered car sales by 2040, becoming Japan’s first automaker to say so.

Related: Sony Honda Venture to Market its First EV in 2025

Now Toshihiro Mibe is backing that with numbers as he has announced that Honda will spend 5 trillion yen ($40 billion) on its push into electric vehicles over the next decade to introduce 30 EV models by 2030 with production volume of more than 2 million vehicles a year. In an interview with Bloomberg after unveiling his spending plans, Mibe said:

“We can no longer envision the future by drawing a straight line forward from our autos business as it exists today. Within this broad-scope image, we’re making significant progress.”

Mibe who used to run Honda’s research division before becoming CEO, has largely abandoned Honda’s go-it-alone strategy when it comes to developing and selling EVs. He says, “even so, electrification comes with “high hurdles” that Honda can’t overcome on its own.

sony vision s 02 suv concept

Honda has recently announced that its joining forces with tech giant Sony to develop EVs that will go on sale starting in 2025. Mibe says partnering with Sony, a company operating in a completely different industry, is a way for Honda to create new sources of value for its cars that the company couldn’t have conceived of on its own. A major draw of its partnership with GM is the cost savings afforded by the automakers’ combined production capacity. Mibe said, together “we have globally significant volume, which will have a huge impact on costs.”

Related: Honda e Becomes the First Japanese Car to Win German Car of the Year Award

In addition Honda and General Motors (GM), earlier this year, have expanded their existing tie-up with plans to jointly develop affordable EVs in major global markets. According to GM and Honda, they will introduce their first EV model in North America by 2027 with a starting price of less than $30,000. Along with GM, Honda is seeking to bring EV costs down to an extent that they reach price parity with gasoline-powered cars, according to Mibe.

honda e

Honda is also looking to expand partnerships further in order to stay abreast of what Mibe sees as “constantly evolving” EV and battery technologies. In a sense, “we’re moving forward with our electrification strategy in a chaotic situation,” Mibe added. “We have to make sure our plans are flexible enough to respond to the daily progression of various technologies.”

Related: EU Countries Agree to Ban New ICE Cars by 2035

According to Mibe, Honda itself will start trial production of solid-state batteries in early 2024 and is discussions with GM about next-generation batteries as well. A benefit, Mibe says, of Honda’s existing partnerships with Sony and GM is that there are no capital ties between the companies that restrict their actions. He says “we are pursuing conversations as companies that are totally free. The partnerships will strongly tie into the competitiveness of our global EV expansion.”

Will Honda’s EV strategy under the leadership of its new CEO bring fruits, we will have to wait to find out. However looking at Honda’s plans it will sure place it ahead of other Japanese automakers if not ahead of the global competition.

Source: Money Control

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