CEO says previous funding for electric vehicle development was 'simply not enough'
Japanese carmaker Honda has announced it will invest $65bn in its electric vehicle (EV) strategy by 2030 in a major acceleration of its plans to transition towards zero emission models.
The carmaker announced on Thursday it was doubling its budget for electrification and software to 10 trillion yen by the decade's end, up from the 5 trillion yen it had earmarked just two years ago.
"As for strengthening software development, we realised the amount we had settled on two years ago was simply not enough, so we significantly increased that portion," CEO Toshihiro Mibe told a press conference on Thursday.
According to Reuters' reports, Honda said it had to "look ahead to the period of EV popularisation and build a strong EV brand and a strong EV business foundation from a medium- to long-term perspective".
The company stressed that its plan for EVs and fuel cell electric vehicles to represent 40 per cent of sales by 2030 and 100 per cent by 2040 remained unchanged, adding that it was aiming produce more than two million EVs annually by 2030.
The update also set out the auto giant's plan to add seven new EV models of varying sizes to its global lineup by 2030, with the vehicles to be launched in the US first from 2026.
The automaker said it aimed to cut battery procurement costs in North America by more than 20 per cent and reduce production expenses by about 35 per cent by 2030.
It also announced plans to launch 10 new models into the Chinese market by 2027 as it works towards a target of 100 per cent EV sales in the Asian nation by 2035.
And the company detailed plans to launch a commercial-use mini-EV in Japan this autumn, personal-use mini-EV models in 2025, and other small EVs in 2026.
Honda has been a relative latecomer to the EV market and faces growing competition from legacy brands that have expanded their zero emission offering more rapidly, and pure-play EV makers such as Tesla and BYD.
A report from InfluenceMap published earlier this week concluded Honda had the lowest proportion of forecasted electric vehicle production by 2030 of any leading carmaker, with the exception of Suzuki.
The NGO also gave the carmaker a low D+ score for its climate policy lobbying efforts, accusing it of undertaking advocacy that was misaligned with science-based climate goals that was threatening the electric vehicle transition.
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