Honda may be the most committed electric car maker in the U.S. right now | Wilnesh News

As the auto industry tries to get to grips with its massive, years-long shift from gas engines to electric vehicles, some traditional automakers are looking to hybrids as a way station for what is now more likely to be defined as hybrids. decades of road. But at least one automaker has said it will strengthen its North American electric vehicle strategy in 2024: Honda Motor Co.

The Japanese company made a series of announcements this spring, including an $11 billion investment in a Canadian electric vehicle hub — what the company calls a “comprehensive electric vehicle value chain” — and Transformation to electric vehicles Ohio Business.

Honda’s EV moves come as other major automakers are pulling back from electric vehicles; in some cases, shelving their EV plans entirely. General Motors Ford said it would no longer provide electric vehicle production targets in order to meet market demand, and Ford said it would postpone about $12 billion in electric vehicle investment.

“Each manufacturer has their own reasons for the direction they want to take,” said Bob Nelson, executive vice president of American Honda Motor Co.

Even as Honda ramps up its commitment to electric vehicles, its investment approach also means hedging its bets. Nielsen said investing $700 million to create an electric vehicle business in Ohio allows the company to adjust production based on market conditions.

“The $700 million investment gives us the flexibility to produce ICE (internal combustion engines) and BEVs (battery electric vehicles) on the same production line. We believe this is a smart strategy as the market continues to grow,” Nielsen said .

It also aims to build expertise, efficiencies and knowledge that can be shared across all of Honda’s North American operations, including engineering and procurement, and potentially around the world. “Having all of these capabilities and experiences here gives us the ability to develop the capabilities, standards and margins for electric vehicles that we will use around the world as we expand our electric vehicle footprint,” Nelson said.

He added that Honda expects to achieve its goal of 80% electric vehicles in its vehicle lineup by 2035 and 100% electric vehicles by 2040.

Critics say Honda’s transition to electric vehicles is too late

Some industry analysts say Honda’s more aggressive short-term EV plans simply reflect its need to catch up.

“They’re definitely catching up and getting into the game,” said Cliff Banks, founder of Bank Report, which analyzes automotive trends.

Meanwhile, other automakers are exiting due to limited customer engagement and costs.

“Automakers have found that it’s very expensive to try to bring viable electric vehicles to market,” Banks said. “Basically, what they’re doing is rebuilding the plane while continuing to fly. Honda will feel the same Cost pressure; I wouldn’t be surprised to see them give up.”

It’s a confusing market for automakers to perfectly time.

“As we make this transition, it’s going to happen over decades. That’s why I’m also extremely proud of our gasoline-powered fleet,” GM CEO Mary Barra recently told NBC News. A GM spokesman was quick to say the company actually aims to sell exclusively electric vehicles by 2035. A version of the model.

Sales have improved recently as the EV market stalls and prices fall. Sales of Ford’s range of electric and hybrid vehicles surged in May, a sign of how difficult it is for the automaker to predict a growing and investment-costly market in the short term.

Banks noted that Honda has made headline-grabbing announcements in the past that have yet to materialize, noting that a plan to launch an electric vehicle with General Motors never got off the ground. Regarding Honda’s plan to produce 240,000 electric vehicles in Canada, Banks said, “We’ll see.”

“I think there will be some short-term changes along the way, but we’re still in the early stages of the transition to battery-powered electric vehicles,” Nielsen said. Honda is also talking to Nielsen about hybrid vehicles, adding that vehicles like the CR-V The hybrid model is a good “transition car” for consumers to enter the world of electric vehicles.

The EV market remains unstable, if not chaotic

Some industry analysts believe Honda’s electric vehicle strategy is more than skin deep and may be more opportunistic than unique in its long-term plans.

Cars.com editor Jenni Newman said Honda could fill the gap as other automakers downsize.

According to the latest survey by Kelley Blue Book, Tesla, which has long held a leading position in the electric vehicle market, saw its market share drop to 51.3% in the first quarter from 61.71% last year.

The arrival of competitors destabilizes the market. “It’s not chaos, but it’s close. Tesla lowered the price of new cars, which affects the used car side,” Newman said.

Meanwhile, established OEMs like Honda are launching electric vehicles of their own, as well as upstarts like Rivian, which just redesigned its all-electric R1 pickup and SUV models to use Nvidia chips to improve range. , performance and computing power.

“We don’t know how this is going to end,” Newman said.

GM itself plays a key role in Honda’s launch of the Prologue, its first mass-market electric car. It’s based on the Chevrolet Blazer design, while Honda’s luxury brand Acura is basing its first electric car on the Cadillac – both adding Honda-centric style and features.

“This is not unusual in the automotive world; this is a way for them to step in,” Newman said, likening it to Toyota’s partnership with Subaru. Honda’s investment in Ohio will help increase Prologue production.

Because the supply chain of the entire automotive ecosystem is very complex, it is difficult for automakers to transform quickly. For Honda, going fully electric by 2040 is in line with the transformation of other automakers, which Newman described as “pretty fast.” “That’s a long time for you and me, but for the automakers, it’s the planning they have to do because of the scope of the industry and the globalization of the industry,” she said.

Honda plans to achieve 100% zero emissions by 2040, relying not only on electric vehicles but also on fuel cells. Honda and General Motors this year began jointly producing hydrogen fuel cells as a diesel alternative to conventional car technology. Honda also plans to increase hiring and construction efforts at its Ohio plant, a $3.5 billion joint venture with LG Energy Solution, which will provide batteries for Honda and Acura electric vehicles in 2022.

Honda may have brand advantage

Honda has a trusted brand at a time when consumers and automakers alike are skeptical about electric vehicles. An Edmunds survey this year asked customers which brands they trust to make the best electric vehicles. Tesla ranks first with a 23% share, followed by BMW (13%), Toyota (12%) and Honda (8%). Ford rounds out the top five.

Jessica Caldwell, director of insights at Edmunds, pointed out that Hyundai and Kia are doing more in the electric vehicle field but are not in the top five. Meanwhile, Toyota and Honda stand out among consumers despite only producing one all-electric model (BMW makes five). “It prepared Honda,” she said.

In April, Honda became the second-fastest-selling mass-market car brand on Cars.com.

Market downturn coupled with government incentives Making electric vehicles affordable But consumer confidence in electric vehicles still appears to be deteriorating, or at least stagnant. Gallup poll Americans in April found that electric vehicle ownership was increasing 3% annually, but the share of consumers who expressed a strong interest in purchasing an electric vehicle had declined by the same amount, from 12% to 9%. Overall, 35% of Americans said they might consider buying an electric vehicle in the future, down from 43% last year.

Even for an EV maker like Honda, which scored well in the survey, barriers remain and go beyond tangible issues like affordability, improved battery life, range and charging station availability. Another big obstacle is politics. “There’s a segment of the public that doesn’t think electric vehicles are for them,” Caldwell said. “They’ve made up their mind and they don’t support it. It’s almost like a political position, so it doesn’t matter how good the vehicle is.” DeMonz’s survey revealed a partisan divide, with Republicans less willing than Democrats to buy electric vehicles or more broadly supportive of the transition. “Automakers have to overcome this problem,” Caldwell said.

For Honda, brand is an advantage and it doesn’t want to wait too long before trying to capitalize on it in electric vehicles. At the very least, “they need to be part of the conversation,” Newman said.