In a surprise move, Honda’s CEO, Toshihiro Mibe revealed that the $5 billion deal with General Motors about the joint development of affordable electric SUVs has been canceled.
It was April 2022 when Honda and GM announced they were working together on a new global EV-dedicated architecture, set to be primarily used for crossovers/SUVs using the latter’s Ultium technology. Just one and a half years later, the companies issued a joint statement suggesting that the discontinuation of this plan was a “mutual decision”, adding that “each one remains committed to affordability in the EV market”.
During an interview with Bloomberg, 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”. As reported by Automotive News, Mibe cited cost and driving range among the reasons for the project’s cancellation, alongside a “changing business environment”.
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Reuters suggests that the change of plans might have to do with GM’s decision to slow down EV launches as a way of dealing with the high cost of the UAW. The company recently pleaded uncertain about achieving the predicted profits this year, with the strike costing them around $200 million per week, on top of the $800 million to date.
The now-cancelled models were expected to roll out in 2027 starting from North America before launching in other key markets including South America and China. Honda and GM had set the ambitious goal of producing millions of those vehicles, with a targeted price below $30k in the US.
At the time of the announcements, GM’s CEO, Mary Barra, suggested that by working together, the two companies would roll out the EVs faster than either of them could achieve on their own. Honda’s CEO didn’t give away any details about the new individual plans of each company but said that Honda remains committed to its goal of selling only electrified models by 2040.
Despite the cancellation of this huge project, Honda and GM will keep collaborating in other areas such as EV battery packs and autonomous driving tech. Their partnership also includes the Honda Prologue and Acura ZDX fully electric SUVs which are produced in the US based on the GM Ultium architecture.
