Honda Motor, the Japanese manufacturer of automobiles and motorcycles, has set what it called a challenging target for all of its sales to be electric vehicles (EV) by 2040.
The announcement marks the company’s efforts to try and keep up with the global EV race and revive profits under the new leadership of Toshihiro Mibe. Honda also said it will invest about $46 billion in research and development over the next six years, “regardless of fluctuations in our sales revenue.”
Automakers around the globe are rushing into the EV sector as the industry shifts to electrification and self-driving cars. Among them, Jaguar Land Rover has vowed to go fully electric by 2025, and Volvo by 2030. Japanese Prime Minister Yoshihide Suga pledged to cut greenhouse gas emissions by 46 percent by 2030 from 2013 ahead of the global climate summit hosted by the US President Joe Biden.
“It will be an uphill struggle. It’ll be about how early we can build a structure that lets us make profits,” Mr. Mibe said, noting that Honda’s EV sales are less than 1 percent of its total in Japan.
Honda’s new goals include EVs accounting for 40 percent of sales in North America and China by 2030 and 80 percent by 2035. It has a 20 percent goal for Japan by 2030 and 80 percent by 2035. Japan’s target is different because it is a huge consumer of hybrids, Mr. Mibe said. The carmaker wants to achieve an operating profit margin of 7 percent even as it shifts to EVs, he said.