Home Business Honda and GM Abandon Affordable Electric Vehicle Venture in Strategic Shift

Honda and GM Abandon Affordable Electric Vehicle Venture in Strategic Shift

Honda Motor and General Motors (GM) have decided to abandon their joint efforts to develop affordable electric vehicles (EVs), marking a significant change in strategy that comes just a year after they partnered in a $5 billion endeavor to challenge Tesla’s dominance in the EV market. This development underscores GM’s shift towards a more profit-oriented approach, as the company grapples with the rising costs associated with recent United Auto Workers strikes, which reached as high as $200 million per week.

In a jointly issued statement, the two companies clarified their decision, stating, “Following thorough studies and extensive analysis, we have collectively arrived at the conclusion to terminate this program. Nevertheless, both organizations remain steadfast in their dedication to enhancing affordability within the electric vehicle (EV) market.” Despite the conclusion of this particular venture, both automakers maintain their unwavering commitment to advancing electric vehicle accessibility for consumers. Their collective resolve to address the challenges of affordability in the EV sector remains resolute.

Honda has stated that this change will not impact its long-term plan to exclusively sell electrified vehicles by 2040, indicating that the company remains dedicated to transitioning to cleaner and more sustainable transportation options.

GM’s decision to withdraw from this project reflects a larger change in its electric vehicle strategy. The company is refocusing its efforts and shifting away from the entry-level segments, which include a $5 billion commitment aimed at bolstering GM’s Bolt EV. GM’s withdrawal aligns with its strategic realignment to prioritize profitability.

The collaboration between Honda and GM, which began in April of last year, aimed to develop a series of lower-priced EVs based on a new joint platform. This partnership aimed to produce potentially millions of electric vehicles starting from 2027. The companies had initially indicated that this initiative was designed to bring affordable EVs, including compact crossover vehicles, to the market, leveraging GM’s Ultium battery technology.

However, as time passed, both automakers realized that pursuing this particular business strategy would be challenging. The decision to end the development of an affordable EV has been made after studying it for a year, as explained by Honda CEO Toshihiro Mibe.

It’s important to note that while this particular joint venture is being discontinued, Honda’s separate partnership with GM and its Cruise autonomous driving subsidiary remains unaffected by the recent safety incident in California. This incident led to the suspension of Cruise’s driverless testing permit in the state, following an order from California authorities to remove the company’s driverless cars from public roads, citing potential risks to public safety and misrepresentations of technology safety.

Honda had announced its plans to establish a joint venture with GM and Cruise in the first half of 2024. This joint venture aims to introduce a driverless ride service in Japan by early 2026, signifying Honda’s commitment to autonomous driving technology.

Despite this setback, the landscape of electric vehicles and autonomous driving continues to evolve rapidly, and both Honda and GM are determined to navigate the changing terrain and contribute to the future of mobility.

Previous article Morocco Signs Multimillion-Dollar Financing Agreements with African Development Bank
Next articleThe Digital Euro’s Evolution: A Major Milestone in Central Bank Digital Currencies


Please enter your comment!
Please enter your name here