Honda: Investing JPY 10 trillion in EVs and software by 2030
Building a vertically-integrated EV value chain, collaboration with Nissan and Mitsubishi
2024/08/23
- Summary
- 2024 Honda Business Briefing: Direction of Electrification Initiatives and Investment Strategy
- EV lineup strategy
- EV development approach: "Thin, Light, and Wise."
- Honda and Nissan: Collaboration in areas such as next-generation SDVs, batteries, and e-Axles, with Mitsubishi Motors also participating
- Financial strategy: Resource investment plan
- Honda's consolidated performance: Aiming for an operating profit margin of 7% in FY2024
- GlobalData Production Forecast: Honda Group’s production in 2027 will be 4.0 million units
Summary
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| “Honda 0 Series” EV concept models “Saloon” and “Space-Hub” at CES 2024 (Source: Honda's 2024 Business Briefing (May 16, 2024)). |
In May 2024, Honda Motor Co., Ltd. (Honda) presented its progress in electrification in its "2024 Business Briefing". In preparation for the period of EV popularization from the late 2020s onwards, Honda will launch a new EV series, the Honda 0 Series, globally starting in 2026, with the goal of achieving a 40% sales ratio of EVs and FCEVs and EV production of 2 million units by 2030.
By 2030, the company plans to reduce battery costs by 20% from the current level, reduce production costs by 35% at its dedicated EV plant in Canada, which will start operations in 2028, and achieve an operating margin of 5% for its EV business.
To execute the above plan, Honda plans to invest JPY 10 trillion in the areas of electrification and software over the 10 years to 2030. To secure the necessary financial resources, the company aims to generate JPY 12 trillion in operating cash flow from FY2021 to FY2025 by strengthening its motorcycle and ICE/hybrid businesses, and to generate more than JPY 12 trillion in cash flow from FY2026 to FY2030 by further contributing to earnings from its EV business.
In August 2024, Honda and Nissan Motor Co., Ltd. (Nissan) announced that they would collaborate in areas such as next-generation SDVs, batteries, and e-Axles. Mitsubishi Motors Corporation will also be participating in Honda’s electrification initiatives.
Related reports:
Auto China 2024: Japanese OEMs (May. 2024)
Carbon Neutrality Initiatives at Japanese OEM Plants (Mar. 2024)
CES 2024: New EV models highlight OEM strategies (Feb. 2024)
Japan Mobility Show 2023: Electrification Technologies (2) (Nov. 2023)
Plans by Japanese OEMs to Introduce Electrified Vehicles (Aug. 2023)
Honda: Strengthening Alliance in EV Battery and Resource Procurement (Jun. 2023)
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