Longtime partners Honda and General Motors have decided to cancel their planned collaboration in cheaper electric vehicle offerings development for the North American market, Honda CEO Toshihiro Mibe told Bloomberg.
The decision is apparently due to the changing EV business environment, prompting the two legacy automakers to set priorities.
Initial plans
GOBankingRates reported that the Japanese and American automakers initially disclosed intentions to strengthen their partnership with a new $5 billion EV project in April 2022.
As mentioned, the planned joint venture aims to develop and produce affordable models as the companies seek to address the affordability issues that impede the shift to e-mobility.
These models were expected to ride on GM’s Ultium platform and battery pack with starting prices below $30,000 in North America by 2027.
Changes
On Wednesday, the partners officially decided to scrap the project after analyzing the details of the past year. Nonetheless, they still aim to explore the development of affordable EV models, but separately.
“After studying this for a year, we decided that this would be difficult as a business, so at the moment, we are ending development of an affordable EV.”
Honda CEO Toshihiro Mibe
GM spokesperson Sanaz Marbley provided a similar explanation about the sudden plan changes.
“Last year, we began working on an affordable EV program for global markets, which was slated for introduction in 2027. After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market.”
GM spokesperson Sanaz Marbley
The move is unsurprising, considering the current situation of the EV industry. As EV-a2z reported, Tesla CEO Elon Musk warned that the surging sticker prices and interest rates will continue to weaken the demand for electric vehicles.
GM to slowdown EV models launch
The project cancellation comes after GM announced plans to slow down its launch of new EV models amid the waning demand.
The American automaker warned that it will delay its electric truck production at the Orion Assembly factory through 2025 as it aims to “better manage capital investments.”
Nonetheless, GM and Honda confirmed that they will still pursue their other projects, such as EV battery development and autonomous driving tech.
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Despite the plan changes, Honda emphasized that it will still target a full electric transition by 2040. Meanwhile, GM is set to revive the Chevrolet Bolt after almost killing it due to its now-canceled plans to launch new models.
