Photo: Honda
Honda partnered with GM to advance its EV strategy in North America, with the Acura ZDX and Honda Prologue as the first fruits of this partnership. The two carmakers agreed in 2022 to develop a new EV architecture for small SUVs. After GM delayed its EV plans, Honda was left with no choice but to cancel the partnership.
The Japanese carmakers are a little behind with their EV plans as the world moves faster toward electrification. Even Nissan, which was one of the pioneers of electrification with the Leaf, is now almost wiped out of the EV market. Honda has tried its hand at electric vehicles with the small Honda e in Europe and a couple of models in China, but the success has failed to materialize. To move more quickly, the Japanese carmaker partnered with GM to launch several electric vehicles on its Ultium platform.
I guess Honda believed Mary Barra's bullish statements about going all-in with EVs and plans of surpassing Tesla by mid-decade. After developing the Acura ZDX and the Honda Prologue on the Ultium platform, Honda and GM signed an agreement to widen the partnership. Honda was interested in developing a smaller EV platform to underpin future crossovers.
The new EV architecture was supposed to derive from the existing Ultium platform but with lower production costs. It would've allowed building electric crossovers with a price tag below the $30,000 Chevrolet Equinox EV and similar future models from Honda. The first models based on this architecture were planned to arrive in 2027, but things didn't work out the way the Japanese carmaker wanted.
Honda's miscalculation was that GM would also be interested in pursuing small EV development. Although the Detroit giant signaled its intention to enter the European market with its electric vehicles, it has little benefits in building smaller and less profitable EVs. That became clear during the third quarter earnings call when GM announced postponing its EV plans. All existing Ultium-based vehicles are affected, and, it turns out, even the ones not yet on the market.
Faced with delays out of its control, Honda decided to withdraw from this partnership. Honda CEO Toshihiro Mibe offered a similarly vague explanation as Mary Barra: changing business environment. Although Mibe said Honda and GM will search for a solution separately, you can bet the plans for a more affordable EV are dead and buried. Cheap EVs are nowhere as profitable as the more luxurious SUVs, while development costs are equally high. Developing a new platform from scratch doesn't make sense without a partner to share the expenses.
GM is not the only traditional carmaker that is having second thoughts about electric vehicles. Ford also delayed plans to ramp up EV production, while Volkswagen is treading water with its EV plans. Stellantis has been doing this for a long time, while the Japanese carmakers are still convinced that hybrid vehicles are a better solution.
I guess Honda believed Mary Barra's bullish statements about going all-in with EVs and plans of surpassing Tesla by mid-decade. After developing the Acura ZDX and the Honda Prologue on the Ultium platform, Honda and GM signed an agreement to widen the partnership. Honda was interested in developing a smaller EV platform to underpin future crossovers.
The new EV architecture was supposed to derive from the existing Ultium platform but with lower production costs. It would've allowed building electric crossovers with a price tag below the $30,000 Chevrolet Equinox EV and similar future models from Honda. The first models based on this architecture were planned to arrive in 2027, but things didn't work out the way the Japanese carmaker wanted.
Honda's miscalculation was that GM would also be interested in pursuing small EV development. Although the Detroit giant signaled its intention to enter the European market with its electric vehicles, it has little benefits in building smaller and less profitable EVs. That became clear during the third quarter earnings call when GM announced postponing its EV plans. All existing Ultium-based vehicles are affected, and, it turns out, even the ones not yet on the market.
Faced with delays out of its control, Honda decided to withdraw from this partnership. Honda CEO Toshihiro Mibe offered a similarly vague explanation as Mary Barra: changing business environment. Although Mibe said Honda and GM will search for a solution separately, you can bet the plans for a more affordable EV are dead and buried. Cheap EVs are nowhere as profitable as the more luxurious SUVs, while development costs are equally high. Developing a new platform from scratch doesn't make sense without a partner to share the expenses.
GM is not the only traditional carmaker that is having second thoughts about electric vehicles. Ford also delayed plans to ramp up EV production, while Volkswagen is treading water with its EV plans. Stellantis has been doing this for a long time, while the Japanese carmakers are still convinced that hybrid vehicles are a better solution.
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