Just one year after agreeing to collaborate in an attempt to surpass Tesla in sales, Honda Motor (7267.T) and General Motors (GM) have abandoned their plan to manufacture inexpensive electric cars (EVs) jointly, the Japanese business announced on Wednesday.
The choice highlights GM’s (GM.N.) strategy change to delay the introduction of many EV models to concentrate on profitability as the company struggles with the escalating expenses of this month’s $200 million weekly United Auto Workers strikes. The American manufacturer canceled its earlier profit forecast for 2023 on Tuesday. “After conducting some research and analyses, both parties decided to end the development,” Honda stated. “Each company will continue to work towards offering affordable models to the EV market.”
According to the Japanese corporation, its goal of selling solely electric vehicles by 2040 has not changed.
The two companies decided to work together to create a new shared platform for a range of more affordable electric vehicles (EVs) in April of last year to produce millions of vehicles by 2027. The agreement, according to the manufacturers, was for “affordable” EVs, such as small crossovers, that were constructed with GM’s Ultium battery technology.
The decision was initially announced by Bloomberg, which included a quote from Honda CEO Toshihiro Mibe. “After studying this for a year, we decided that this would be difficult as a business, so at the moment, we are ending development of an affordable EV,” Mibe stated in the interview.
A spokesman for Honda stated that the recent safety issue in California that resulted in the suspension of the robotaxi firm’s autonomous testing permit in the U.S. state will not affect its separate cooperation with GM and its Cruise subsidiary.
California said on Tuesday that Cruise had “misrepresented” the technology’s safety and ordered the corporation to take its autonomous cars off state highways.
To launch a driverless transportation service in Japan in early 2026, Honda stated last week that it intended to form a joint venture with GM and Cruise in the first half of 2024. GM did not reply to Reuters’s request for comment right away.
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