Honda announced its plans to spend $64 billion on research and development in the coming ten years. The decision comes as it plans to push its electrification goals. With a target to roll out 30 electric vehicle models by 2030, the automaker will be developing vehicles alongside.
Its goals include producing some 2 million electric vehicles a year by 2030, aiming to gain a share in the fast-growing market for electric vehicles, led by Tesla, while Japanese automakers risk falling behind European and U.S. rivals. “As far as resource investments over the next 10 years go, we’re going to invest about 8 trillion yen in research and development expenses,” said Honda Chief Executive Toshihiro Mibe, referring to the equivalent of $64 billion.
Honda said it wanted to establish a dedicated electric vehicle production line in North America, where it will also procure Ultium batteries from General Motors. It is also considering a separate joint venture company for battery production there, aside from its GM partnership. Last week Honda said it and GM would develop a series of lower-priced electric vehicles based on a new joint platform, expanding on plans for GM to begin building two electric SUVs for Honda starting in 2024.
Furthermore, the push toward electric vehicles has prompted it to hunt for partners to optimize costs and share technology. “This puts them in good company with a lot of other makers that have made big battery announcements … ultimately the world is going to leave internal combustion engines behind,” said Christopher Richter, an analyst at CLSA. “Given their size, I am glad they are cooperating with General Motors.”
Honda and other Japanese automakers have long said that even as they go electric, they will not give up on older, hybrid technology. Proponents of hybrids point to the many markets, especially in emerging countries, where the infrastructure to support battery electric vehicles will be a long time coming.
“By no means is this the end of hybrids and the replacement of all hybrids with EVs. We will develop our current hybrids and use them as a weapon in our business.” Mibe told the presentation. Honda’s plan to make 2 million EVs annually was within expectations, said analyst Seiji Sugiura of Tokai Tokyo Research Institute. This is because Toyota Motor has already targeted sales of 3.5 million such vehicles by 2030 and Nissan Motor has aims for half its cars to be electric by the end of the decade.