Honda promotes the PLUS version of the electrification strategy: invest US $64 billion in the next 10 years to strengthen cooperation with Ningde era

A year later, Honda management outlined a clearer electrification route. Honda announced on April 12 that it plans to spend 8 trillion yen ($64 billion) on research and development over the next decade, including about 5 trillion yen ($40 billion) in electrification and software technology.

"our goal is to launch 30 electric cars by 2030 and increase the annual production of electric vehicles to 2 million." Honda said in a statement that the company will invest about 43 billion yen to build an all-solid-state battery production demonstration line and further speed up research and development, with the goal of starting demonstration production in the spring of 2024.

Although Honda China insiders told the Financial Associated Press that the current strategy for the Chinese market has not been updated, Honda specifically mentioned in this statement on the same day that it plans to build a special electric vehicle production plant in Guangzhou and Wuhan, and will launch a total of 10 new pure electric models in the Chinese market by 2027. In the field of power batteries, it will further strengthen cooperation with the Ningde era.

Update the electrification blueprint

In April 2021, Toshihiro Mibe, the third division of Honda's global CEO, threw out the vision of "full electrification" at the inauguration conference. According to the plan, Honda will increase the proportion of battery and fuel cell electric vehicles in all major markets to 40% by 2030, 80% by 2035 and 100% by 2040.

"regardless of fluctuations in sales, Honda will invest a total of about 5 trillion yen in R & D projects, including electrification, over the next six years." At that time, Miku Minhong said.

Only a year later, Honda once again released the "enhanced version" of the electric transformation strategy, and detailed it. In the US market, in addition to purchasing Ultium platform batteries from GM, Honda is planning to set up a joint venture battery manufacturer to launch two medium and large pure electric vehicles jointly developed with GM by 2024, namely the new Prologue SUV and Acura EV SUV models. In Japan, Honda will also purchase long-range power batteries for light electric vehicles. At the beginning of 2024, Honda first launched commercial light electric vehicles with a price of "1 million yen", followed by personal light electric vehicles and pure electric SUV.

Honda also has plans to develop and produce its own batteries. For what Honda sees as a "next generation" battery, it will invest 43 billion yen in a demonstration production line for all-solid-state batteries under development, with the goal of going into operation in the spring of 2024 and for models that will be available after 2025. In the long run, Honda will also adopt a self-developed "Honda e:Architecture" platform for pure electric vehicles in 2026.

It is worth noting that Nissan, one of the three major Japanese brands, will also use 2024 as the time point for the trial production of solid-state batteries. On April 8, Nissan released a prototype of solid-state battery production equipment at its Yokohama plant and plans to build a trial production line for all-solid-state batteries in 2024. According to the plan, in fiscal year 2028, Nissan will launch electric models with original all-solid-state batteries that will be able to reduce battery costs to $75 per kilowatt-hour or even to $65 per kilowatt-hour to achieve cost parity between electric and fuel models.

"according to the schedule, both Honda and Nissan's solid-state battery mass production plan is still in the first echelon." In the view of industry insiders, with the unstoppable promotion of electrification, more and more car companies are looking for new battery technology routes. Japan is not the only car company that takes risks to bet on solid-state batteries. "at present, most car giants have more or less solid-state battery research and development layout, combined with these car companies' experience in the field of electric vehicles, may be able to achieve unexpected good results."

The Chinese market may be the key

With regard to the production system of pure electric vehicles, Honda disclosed that the company is planning to build a special electric vehicle production plant in Guangzhou and Wuhan each in China, as well as plans to build electric vehicle production lines in North America.

"although Honda is allied with the US giant General Motors, China is a more advanced electric car market." Takeshi Miyao, an analyst at Carnorama, a Japanese consultancy, has said that gaining a foothold in China is a prerequisite for Honda to achieve its carbon neutrality target by 2040. "this is the best way for Honda to expand the development of electric vehicles."

Honda has bet on the world's largest single car market. In October last year, Honda China officially launched its new pure electric car brand "EVV N", and will launch 10 "ERV N Series" electric vehicles one after another within five years. Two joint ventures, Dongfeng Honda and Guangzhou Auto Honda, have launched e:NS1 and e:NP1 models respectively this year. Relying on the Chinese market, Honda will also deepen the production of pure electric vehicles with two local companies, and their new pure electric vehicle factories will be put into production one after another from 2024, and the pure electric vehicles will be exported to overseas markets in addition to supplying the domestic market. On the dealer side, Honda will push about 1200 dealers in China to create sales areas dedicated to the EVOR N series, and plans to open EVOR N dealerships in major cities to sell only electric models.

In addition to the layout in the field of production and sales, Honda has also made some moves in the field of power batteries, which is the core of electric vehicles. In July 2020, Honda signed an R & D cooperation agreement with Ningde Times and bought about 1% of Ningde Times. In a statement on April 12, Honda specifically stressed that it would further strengthen its cooperation with the Ningde era.

"at present, [Honda] has no update on the China strategy and will continue to implement the previous strategy." Honda China insiders said. According to a promise made by Honda in October, all models launched in China after 2030 will be electric cars.

Retail sales of new energy passenger vehicles in China reached 445000 in March, an increase of 137.6 percent over the same period last year and 63.1 percent month-on-month, and the domestic retail penetration rate of new energy vehicles reached 28.2 percent, up 17.6 percentage points from 10.6 percent in March 2021, according to the Federation of passengers. From January to March, domestic retail sales of new energy passenger vehicles were 1.07 million, an increase of 146.6 per cent over the same period last year.

"We see a strong sales momentum of new energy vehicles in the future." Cui Dongshu, secretary-general of the National passenger vehicle Association, said that despite the epidemic, chip shortage, rising raw material prices and other adverse factors, China's new energy passenger vehicles have continued a high growth trend. "it is expected that China's new energy vehicle market share will rise to a new high of 65%."