With EVs, Honda may be North America’s most committed automaker, for the moment

As
the
auto
industry
attempts
to
time
its
years-long,
sprawling
shift
away
from
combustible
engines
to
electric
vehicles,
some
legacy
car
makers
are
playing
up
hybrids
as
a
waystation
along
what
is
now
more
likely
to
be
framed
as

a
decades-long
path. But
at
least
one
automaker
says
it
is
ramping
up
its
North
American
EV
strategy
in
2024: Honda
Motor
Company.

This
spring,
there
has
been
a
flurry
of
announcements
from
the
Japanese
company,
including

an
$11
billion
investment
in
a
Canadian
EV
hub
—
the
company
calls
it
a
“comprehensive
EV
value
chain”
—
and
an

EV
transformation
of
Ohio
operations.

Honda’s
EV
moves
come
against
the
backdrop
of
EV

pullbacks
from
other
major
auto
manufacturers;
and
in
some
cases,

shelved
EV
plans
altogether.
GM
said
it
no
longer
will
provide EV
production
targets
so
it
can
build
to
market
demand,
while

Ford
said
it
would
delay
about
$12
billion
in EV
investments.

“Each
manufacturer
has
their
reasons
for
their
direction,”
said
Bob
Nelson,
executive
vice
president
of
American Honda
Motor
Co.

Even
as
Honda
commits
more
to
EVs,
its
investment
approach
implies
a
hedging
of
bets.
Nelson
says
a
$700
million
investment
in
creating
the
EV
operations
in
Ohio
gives
the
company
latitude
to
tailor
production
to
market
conditions.

“The
$700
million
investment
gives
us
the
flexibility
to
produce
ICE
[internal
combustion
engine]
and
BEV
[battery
electric
vehicle]
on
the
same
line. We
think
that
is
a
smart
strategy
as
the
market
continues
to
grow,”
Nelson
said.

It’s
also
being
designed
to
build
expertise,
efficiencies
and
knowledge
that
can
be
shared
across
all
of
Honda’s
North
American
operations,
including
engineering
and
purchasing,
and
potentially
around
the
world.
“Having
all
of
those
functions
and
experience
here
gives
us
the
ability
to
develop
the
capabilities,
standards,
and
profits
for
EVs,
which
we
will
use
throughout
the
world
as
we
expand
our
EV
footprint,”
Nelson
said.

He
added
that
Honda
is
on
track
to
achieve
its
goal
of
having
80%
of
its
vehicle
lineup
be
EVs
by
2035
and
100%
by
2040.

Critics
say
Honda
already
late
to
EV
transition

Some
industry
analysts
say
that
Honda’s
more
aggressive
short-term
EV
plan
is
simply
a
reflection
of
its
need
to
play
catch-up.

“They
are
catching
up
and
getting
into
the
game
for
sure,”
said
Cliff
Banks,
founder
of
the
Banks
Report,
which
analyzes
automotive
trends.

Other
automakers,
meanwhile,
are
pulling
back
because
of
limited
customer
engagement
and
cost.

“Auto
manufacturers
have
seen
that
the
costs
are
really
expensive
in
trying
to
bring
viable
EVs
to
the
market,”
Banks
said. “Basically,
what
they
are
doing
is
rebuilding
the
airplane
while
still
flying
it.
Honda
will
feel
that
same
cost
pressure
moving
forward;
I’d
not
be
surprised
to
see
them
back
off.”

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

“As
we
make
this
transformation,
it’s
going
to
happen
over
decades.
And
that’s
why
I
couldn’t
be
more
proud
of
our
gas-powered
fleet
as
well,”
GM
CEO
Mary
Barra
recently
told
NBC
News.
A
GM
spokesman
quickly
followed
up
to
say
the
company
is
actually
aiming
to
exclusively
sell
electric
vehicles
by
2035.

GM
recently
began
shipping
its
first
mass-market,
all-electric
crossover,
a
version
of
its
popular
Equinox
model,
to
dealers.

As
the
EV
market
stalled,
and
prices
dropped,
recent
sales
have
improved.
Sales
of
Ford’s
lineup
of
EVs,
and
also
hybrids,

surged
in
May,
showing
how
tough
it
is
for
automakers
to
forecast
this
evolving,
and
high
investment
cost,
market
in
the
short-term.

Banks
noted
Honda
has
made
splashy
announcements
in
the
past
that
have
not
come
to
fruition,
pointing
to
a

planned
roll
out
of
EVs
with
GM
that
never
got
off
the
ground.
Regarding
Honda’s
plans
to
produce
240,000
EV
units
in
Canada,
Banks
said,
“We’ll
see.”

“I
think
there
will
be
some
short-term
changes
along
the
way,
but
we
are
still
early
into
this
transition
to
battery-powered
electric
vehicles,”
Nelson
said.
Honda
is
talking
up
hybrids,
too,
with
Nelson,
adding
that
hybrid
models
like
its
CR-V
is
a
good
“transition
car”
to
get
consumers
into
the
EV
world.

An
unsettled,
if
not
chaotic,
electric
vehicle
market

Some
industry
analysts
view
Honda’s
EV
strategy
as
more
than
just
cosmetic,
if
maybe
more
opportunistic
than
unique
in
its
long-term
plan.

Cars.com
editor
Jenni Newman said
Honda
can
fill
a
void
as
other
automakers
scale
back. 

According
to
Kelley
Blue
Book’s
latest
survey,
Tesla,
long
the
EV
market
leader,
saw
its
market
share
fall
to
51.3%
during
the
first
quarter,
down
from
61.71%
last
year.

The
arrival
of
competitors
has
left
the
market
unsettled.
“It
is
not
chaos,
but
it
is
close.
Tesla
has
decreased
prices
on
their
new
cars,
which
has impacted
the
used
car
side,” Newman said.

Meanwhile,
well-established
OEMs
like
Honda
are
coming
in
with
their
own
EVs,
along
with
upstarts
like
Rivian,
which
just redesigned
its
all-electric
R1
pickup
and
SUV
models to
improve
range,
performance
and
computing
power
using
Nvidia
chips.

“We
do
not
know
how
it
will
all
shake
out,” Newman said.

GM
itself
is
playing
a
key
role
in
the
first
mass-market
EV
Honda
is
introducing,
the
Prologue.
It
uses
the
Chevy
Blazer
design,
while
Honda’s
luxury
brand,
Acura,
is
basing
its
first
EV
on
a
Cadillac
—
both
with
added
Honda-centric
styles
and
features.

“This
is
not
unusual
in
the
automotive
space;
it
is
a
way
for
them
to
jump
in,” Newman says,
likening
it
to
Toyota’s
collaboration
with
Subaru.
Honda’s
investment
in
Ohio
will
allow
for
ramping
up
of
Prologue
production.

It’s
difficult
for
automakers
to
make
quick
pivots
because
of
the
complex
supply
chains
that
feed
into
the
entire
automotive
ecosystem.
For
Honda,
being
fully
EV
by
2040
is
in
line
with
other
automaker
transitions,
which Newman described
as
“fairly
fast”
for
all.
“That
is
a
long
time
for
you
and
me,
but
for
an
automaker,
that
is
the
planning
they
have
to
do
because
of
the
scope
of
the
industry
and
the
globalization
of
the
industry,”
she
said.

Honda’s
plan
to
get
to
100%
zero
emissions
by
2040
relies
on
more
than
just
EVs,
too,
with
fuel
cells
in
the
mix
as
well.
In
a
separate
shift
away
from
traditional
auto
technology,
Honda
and
GM
began
to jointly
produce
hydrogen
fuel
cells as
a
diesel
alternative
this
year.
Honda
has
also
ben
ramping
its
hiring
and
construction
at
an
Ohio
plant
formed
by
a
$3.5
billion
joint
venture
with
LG
Energy
Solution
in
2022,
which
will
provide
batteries
for
Honda
and
Acura
EVs.

Honda
could
have
a
brand
advantage

Honda
has
a
trusted
name
with
consumers
to
capitalize
on
at
a
time
of
doubts
about
EVs,
among
both
consumers
and
carmakers.
A
survey
this
year
conducted
by
Edmunds
asked
customers
which
brands
they
trust
to
make
the
best
EV. Tesla
finished
first
at
23%,
followed
by
BMW
at
13%,
Toyota
at
12%,
and
Honda
at
8%.
Ford
rounded
out
the
top
5.

Hyundai
and
Kia
have
done
much
more
in
the
EV
space
but
didn’t
make
it
into
the
top
five,
noted
Jessica
Caldwell,
Head
of
Insights
at
Edmunds. Toyota
and
Honda,
meanwhile,
made
the
cut
among
consumers
even
though
they
produce
just
one
fully
EV
model
(BMW
produces
five).
“This
sets
Honda
up
well,”
she
said. 

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

The
market
downturn,
coupled
with
government
incentives,
are

bringing
EV
prices
into
striking
distance
of
traditional
cars,
but
consumer
sentiment
over
EVs
still
seems
to
have
soured,
or
at
least
stalled. A
Gallup
poll
of
Americans
in
April
found
ownership
of
EVs
increasing
by
3%
annually,
but
an
equal
percentage
decline
in
consumers
who
indicated
serious
interest
in
buying
an
EV,
down
from
12%
to
9%.
Overall,
35%
of
Americans
said
they
might
consider
buying
an
EV
in
the
future,
down
from
43%
last
year.

Roadblocks
will
remain,
even
for
EV
manufacturers
like
Honda
that
score
high
in
surveys,
and
not
only
the
tangible
issues
of
affordability,
improving
battery
life,
range,
and
charging
station
availability.
Another
big
hurdle
is
political.
“There
is
a
portion
of
the
public
that
has
decided
that
EVs
are
just
not
for
them,”
Caldwell
said.
“They
have
made
their
mind
up,
they
don’t
support
it.
It
is
almost
like
a
political
standpoint,
so
it
doesn’t
matter
how
good
the
vehicles
are.”
Edmunds
surveys
show
a
partisan
divide,
with
Republicans
less
inclined
than
Democrats
to
buy
an
EV
or
support
the
transition
more
broadly.
“Automakers
have
to
overcome
this,”
Caldwell
said.

For
Honda,
brand
is
an
advantage
it
would
not
want
to
wait
too
long
to
attempt
to
capitalize
on
in
EVs.
In
the
least,
“they
need
to
get
into
the
conversation,”
Newman
said.