Honda takes a big step to compete with Tesla and Ford | Arena


Honda plans to create an electric vehicle division to compete with American and Chinese electric vehicle manufacturers.

Japanese automaker Honda MotorsHNDAF) said it plans to launch an electric vehicle (EV) division to compete with other electric vehicle giants such as China’s BYD and America’s Tesla.TSLA) – Get a free report.

Honda should catch up quickly as traditional car manufacturers began prioritizing electric vehicles a few years ago to meet demand from consumers who no longer want to buy gasoline-powered cars and trucks.

The automaker said its new division will launch on April 1st. It will combine its electrification strategy with the development of cars, motorcycles and food products such as generators, according to the statement.

Honda also said it will consolidate its current six regional operations to three – which will consist of North America, China and nearby regions, including Japan, and operations that include the rest of Asia and Europe.

The merger of the three regions will allow Honda to “quickly implement resource shifts in line with its future lineup strategy in line with the acceleration of electrification,” a spokesman said at a briefing, Reuters reported.

Honda plans to produce mid-sized and large vehicles in China and North America, and plans to sell small and medium-sized vehicles in two other regions.

Honda changes strategies

In 2022, Honda’s strategy included building 30 electric vehicle models worldwide so that the company could reach its goal of selling two million electric vehicles a year by 2030.

The Afeela, an electric vehicle developed by Honda and Sony (HNDAF), debuted at the Consumer Electronics Show in Las Vegas on January 4th.

Sony Honda Mobility, a joint venture announced last year, said Afeela represents a “feel” that the company says is “at the heart of the mobility experience.”

The company said it wants to provide intuitive augmented reality navigation through its touch technology.

The Afeela will be built at one of Honda’s 12 U.S. plants, with pre-orders open in the first half of 2025 and sales by the end of 2025. Deliveries to North America will begin in the spring of 2026.

Sony Honda Mobility has said it intends to develop Level 3 automated drive in limited environments and provide Level 2+ driver assistance in even more situations, such as city driving.

In 2022, Honda launched the Legend luxury sedan, equipped with the world’s first certified Level 3 autonomous driving technology.

Honda is no stranger to the electric vehicle market and released its version of the electric vehicle back in 1997 with the Fit EV-Plus or Honda EV Plus as it is better known.

The company also released an electric version of the Honda Fit hatchback in 2012, inspired by the space age MC-β in 2014 and the Clarity Electric in 2016.

Why Honda needs to catch up

While Honda and Toyota have long maintained significant market share of gasoline-powered vehicles, the country is lagging behind both its American and European counterparts, who have increased their offerings and increased range, which has long been a barrier to attracting some drivers. from switching.

In recent years, Honda has lagged behind its market share as buyers have been looking for either electric vehicles or hybrids.

Honda’s U.S. sales for the September quarter were 222,049 units, down 36% from a year ago, as supply chain problems due to shortages of semiconductor chips contributed to lower production. The number of vehicles sold was 100,000 below the 345,000 mark reached in the first quarter of 2021. Honda’s overall market share is down to 6.5% in 2022, down from over 10% in 2021, according to Cox Automotive data.

Honda sales fell in July-September as the automaker hit its fifth straight quarter of losses.

Honda’s EV battery efforts

Last October, Honda revealed the location of its new electric vehicle plant: Ohio. The Japanese automaker and LG Energy Solution are investing $4.4 billion to produce batteries for their new models.

The company is the latest entrant in growing competition and said Oct. 11 that its lithium-ion battery plant will be located in Fayette County, Ohio, about 40 miles southwest of Columbus.

The two companies plan to initially invest $3.5 billion and hire 2,200 employees in the joint venture, but plan to spend $4.4 billion overall.

The automaker also plans to spend more capital on a $700 million refurbishment of three Ohio plants, as well as hiring 300 new employees to ramp up electric vehicle production.

Construction of the new plant will begin in early 2024 and is expected to be completed by the end of 2024. The aim of the plant is to start mass production of pocket-type lithium-ion batteries by the end of 2025.

U.S. electric vehicle production is expected to begin by 2026, the company said.

The battery cases will be manufactured at Honda’s engine plant in Anna, Ohio. These cases will be combined with the joint venture’s battery modules, which will be housed in electric vehicles built at two other factories in Ohio.

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