Honda willing to form new alliances to make electrification profitable

By Arya M Nair, Official Reporter
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Honda EV
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Honda Motors, a popular Japanese automaker, has stated its willingness to develop new alliances in order to make electrification profitable.

The decision highlighted the global auto industry’s pressure to share technology and costs in order to fulfill the demand for cleaner automobiles. Mr. Toshihiro Mibe has taken over as CEO of Japan’s second-largest automaker at a time when the automotive industry is shifting toward electric vehicles (EVs) and autonomous driving.

Honda and its alliance partner General Motors (GM) have announced earlier that in 2024 they would launch two jointly designed large-sized EV models in North America, using GM’s Ultium batteries, as well as a series of new models based on the “e:Architecture” EV platform.

Although Honda has never been a big fan of electric vehicles, it has been a leader in improving fuel efficiency and reducing emissions ever since the introduction of the Compound Vortex Controlled Combustion (CVCC) engine in the early-1970s and the first Insight hybrid in 2000. Recently Honda revealed that its first new volume battery-electric vehicle (BEV) will be named “Prologue”.

Toshihiro Mibe
Mr. Toshihiro Mibe
Honda CEO

“If through an alliance Honda can accomplish early what it should aim to be, then we’d be willing to form an alliance. It will become a huge direction in terms of increasing the number of electric vehicles, considering how electrification is not commercially feasible right now.”

Mr. Mibe declared earlier this year that the company would try to be carbon neutral by 2050. Honda intends to sell only zero-emission vehicles in North America by 2040, using a combination of BEV that General Motors will build for the company and fuel cells.

The automaker expects its car business profitability to improve in the coming fiscal year as a result of closing numerous unprofitable manufacturing facilities, including those in the UK, Turkey, and Japan. Last year, Honda saw an operating income margin at 13 percent for motorcycles and 1 percent for cars.

According to reports, Honda will use electrification as an opportunity to examine its product range and increase profitability, and that the company is exploring a new digital service or business by using customer data.

Related: Honda takes up the challenge; Promises 100% electric vehicles by 2040