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KEY TAKEAWAYS
- Honda plans to invest almost 10 trillion yen ($64.4 billion) in its electric vehicle strategy through its 2031 fiscal year, as it seeks to catch up with Tesla and its Chinese rivals.
- The Japanese automaker has a target of having EVs and fuel-cell EVs account for 40% of its global auto sales by 2030.
- The increased investment by Honda comes as EV makers scale back their expansion amid slowing growth and intense competition from cheaper Chinese models.
Honda Motor ( HMC ) on Thursday said it plans to invest about 10 trillion yen ($64.4 billion) in its electric-vehicle strategy over the 10-year period through fiscal 2031, as the Japanese automaker seeks to catch up with Chinese rivals and Tesla ( TSLA ).
Japan’s carmakers have long produced hybrid vehicles but are increasingly amping up their EV production, even as companies are scaling back their EV expansion plans amid soaring costs and slowing demand. Chinese EV firms have also been launching cheaper models and dominating their domestic market.
Honda ‘Confident That the EV Shift Will Continue to Proceed Steadily’
Honda and domestic rival Nissan said they were exploring an EV partnership in March. Honda said Thursday that it believes that EVs are “the most effective solution in the area of small mobility products such as motorcycles and automobiles,” and that it is “confident that the EV shift will continue to proceed steadily.”
The Japanese automaker said it targets having EVs, including hydrogen-powered fuel-cell electric vehicles (FCEVs), account for 40% of its global auto sales by 2030, and plans to increase its production of EVs to 2 million units by then.
Honda’s investment into EVs comes as Tesla introduces fresh measures to revive demand. Earlier this month, the top U.S. EV maker introduced discounted financing for its Model Y after 18 months of select price reductions across its vehicle lineup.
Honda American depositary receipts (ADRs ) were trading 2.7% lower at $32.94 as of 10:46 a.m. ET Thursday but are up 6.6% in 2024.