.png)
Honda's CEO declared that prior investments in electric vehicle (EV) development were "simply not enough," prompting the Japanese automaker to increase its financial commitment to its EV initiatives dramatically. The company now plans to allocate $65 billion towards its electric vehicle strategy by 2030, effectively doubling its previous budget.
In a significant shift, Honda revealed on Thursday that it would enhance its spending on electrification and software technologies to 10 trillion yen by the decade's end, a substantial rise from the 5 trillion yen budget set just two years earlier. This move marks a pivotal acceleration in Honda's drive to transition to zero-emission vehicle models.
"As for strengthening software development, we realised the amount we had settled on two years ago was simply not enough, so we significantly increased that portion," CEO Toshihiro Mibe told a press conference on Thursday.
According to Reuters reports, Honda had to "look ahead to the period of EV popularisation and build a strong EV brand and a strong EV business foundation from a medium—to long-term perspective."
Despite Honda's significant ramp-up in EV investment, the company affirmed that its existing goals for electric and fuel cell electric vehicle sales remain steadfast. By 2030, these vehicles are expected to constitute 40% of total sales, with a target of achieving 100% by 2040. Furthermore, Honda is aiming to manufacture over two million EVs annually by the end of this decade.
The automaker has outlined an ambitious plan to introduce seven new EV models of various sizes to its global lineup by 2030, with initial launches scheduled for the U.S. market starting in 2026. To enhance cost-efficiency, Honda intends to reduce battery procurement costs in North America by over 20% and cut production expenses by approximately 35% by 2030.
Additionally, Honda plans to penetrate the Chinese market more deeply by introducing ten new models by 2027, aligning with its goal to achieve 100% EV sales in China by 2035.
The company also revealed imminent plans to introduce a commercial-use mini-EV in Japan this autumn, followed by personal-use mini-EV models in 2025 and other small EVs in 2026.
Despite these efforts, Honda is recognised as a late entrant in the EV market, contending with established automotive brands that have more quickly expanded their zero-emission offerings and pure-play EV manufacturers like Tesla and BYD.
A recent report from the non-profit InfluenceMap critiqued Honda for having the lowest proportion of forecasted EV production by 2030 among leading carmakers, except for Suzuki. The report also assigned Honda a low D+ rating for its climate policy lobbying efforts, criticising the company for engaging in advocacy that allegedly diverges from science-based climate objectives, potentially hindering the transition to electric vehicles.
Comments