Honda Backing Out of Affordable EV Deal With GM


honda backing out of affordable ev deal with gm

Honda is gearing up to release its first mass-market EV in the U.S. with the new Prologue, but the rest of the automaker’s electric roadmap is still in flux. It initially announced plans to work with GM and others to develop smaller, more affordable electric crossovers, but the company recently confirmed that it was stepping away from that initiative due to shifting business priorities.

Honda CEO Toshihiro Mibe said, “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. GM and Honda will search for a solution separately. This project itself has been canceled.”

Mibe didn’t elaborate further, but a host of issues could be at play. The UAW strike is raging on without an agreement in sight, and General Motors has already warned investors that it would not be hitting its profit targets because of it. The Union struck locations that built the most in-demand vehicles, so it’s not surprising to see EVs take a hit.

This likely feels like a significant setback for Honda. The automaker got a slow start with electrification and doesn’t have the robustness in its American lineup that many others do. This change won’t affect its partnership with Sony on another EV project, but ditching affordable EVs won’t help the country get any closer to an electric tipping point.

[Image: Honda]

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