Japanese automaker Honda Motor Company has revealed plans to invest around ¥10tn ($91bn) in the development and production of electric vehicles (EVs) in the next decade until fiscal year 2030, double the amount it had announced in April 2022. The company’s decision was influenced by the need to ensure the stable supply of batteries, a crucial factor in the highly competitive EV market. Honda’s CEO, Toshihiro Mibe, stated that the company could secure sufficient funds for the investment as it is capable of creating capital through robust sales of hybrid vehicles and motorcycles.
The automaker aims to increase global EV production to over two million units per annum by the end of 2030, involving expanded capabilities in EV production and technology improvements. Honda has set a target of selling only EVs and fuel cell vehicles as new autos by 2040. In fiscal year 2023, which ended in March 2024, Honda sold roughly 4.1 million vehicles globally.
Of the ¥10tn investment, ¥6tn will go towards electrification technology and production capacity, including constructing an EV plant in Canada expected to go online in 2028. Honda is targeting a 35% reduction in EV production costs through the use of large-scale metal casting equipment that will help it decrease the number of battery pack parts involved in manufacturing.
Honda has also set aside around ¥2tn for auto software development aimed at creating sophisticated technologies linked to driving assistance and traffic safety. The funds will be used to develop software that will synchronise all of the vehicles’ components automatically. Additionally, Honda aims to invest roughly ¥2tn to create a supply chain for EV batteries in North America, Japan, and other locations enabling Honda to secure enough batteries for two million EVs by 2030, combining in-house production with procurement from external sources.
In conclusion, Honda’s CEO Mibe believes that the automaker can achieve its targets to produce sufficient EVs and acquire enough batteries to meet the demands of the fast-growing EV market. Honda’s strong focus on EV technology and the introduction of advanced driver assistance systems could well set it apart from its rivals. The effective combination of Honda’s innovation and substantial investment should make the company a significant player in the race for more sustainable vehicles
