Honda to Double Investment to Promote EV Shift

REUTERS/David Dee Delgado/File Photo
A Honda logo is seen at the New York International Auto Show Press Preview, in Manhattan, New York City, U.S., March 27, 2024.

Tokyo, May 16 (Jiji Press) — Honda Motor Co. said Thursday it will invest about ¥10 trillion to promote the development and production of electric vehicles in the decade through fiscal 2030, double the amount the Japanese automaker earmarked under its previous plan in April 2022.

The company decided that further spending is needed to promote a shift to EVs, including ensuring stable supplies of batteries, crucial to gaining a competitive edge in the EV market.

Honda can secure sufficient funds for EV investment as it is becoming capable of creating capital thanks to bullish sales of hybrid vehicles and motorcycles, President and CEO Toshihiro Mibe said at a press briefing.

The automaker aims to expand global EV production to more than two million units per year by calendar 2030, and to have EVs or fuel cell vehicles make up all of its new auto sales by 2040. It sold roughly 4.1 million units globally in fiscal 2023, which ended last March.

Of the 10-trillion-yen investment, about ¥6 trillion will be used for projects aimed at improving electrification technology and production capabilities, including construction of an EV plant in Canada set to go online in 2028.

The automaker will aim to reduce EV production costs by around 35 pct, through the introduction of large-scale metal casting equipment that can cut the number of parts involved in the manufacturing of battery packs.

It aims to invest some ¥2 trillion in auto software development to create advanced technologies linked to driving assistance and accident prevention.

Roughly ¥2 trillion will be used for creating a supply chain for EV batteries in North America, Japan and elsewhere. This will make possible in-house production of batteries, which, combined with procurement from outside partners, will ensure that Honda can secure enough batteries for about two million EVs in 2030.