Honda ends collaboration with GM on cheap electric vehicles

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【Summary】Honda has canceled its plan to collaborate with General Motors (GM) on developing cheaper electric vehicles (EVs). The joint project, announced in April 2022, aimed to create a new platform for affordable EVs in North America, South America, and China by 2027. However, the companies have mutually decided to discontinue the program, citing business difficulties. The platform was supposed to use GM's Ultium batteries, but GM and LG Chem have struggled with mass production.

FutureCar Staff Oct 25, 2023 9:15 AM PT

Honda ends collaboration with GM on cheap electric vehicles

Fans of cheaper electric vehicles received disappointing news as the collaboration between Honda and General Motors (GM) on developing affordable EVs has been canceled. The joint project, which was announced in April 2022, aimed to create a new platform for lower-cost EVs in North America, South America, and China, with plans to release cars in 2027. However, on Thursday, Honda and GM announced the termination of the program.

In a joint statement, Honda and GM stated, "After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market." Honda CEO Toshihiro Mibe further explained in an interview with Bloomberg, "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."

One of the reasons behind the cancellation may be related to the challenges faced by GM and its partner LG Chem in mass-producing GM's Ultium batteries. GM introduced Ultium in 2020 as its third-generation lithium-ion cell, developed in collaboration with LG Chem. The goal was to bring the cost of Ultium cells below $100/kWh. While the first Ultium-based EVs, including the GMC Hummer EV, Cadillac Lyriq, and BrightDrop Zevo 600, went into production in 2022, GM and LG Chem have encountered difficulties in scaling up production.

In July, GM had to halt production at BrightDrop's production line in Canada due to a shortage of battery cells. Sales data from Kelly Blue Book for the first three quarters of 2023 showed that only 6,920 Ultium-based EVs, including the Chevrolet Blazer, Silverado EV, Hummer, Lyriq, and BrightDrop van, were delivered to customers. In comparison, Chevrolet sold 49,494 Bolts, which utilize an older and more expensive battery chemistry. GM had previously announced the end of Bolt production in 2023 to retool for electric trucks, but the production of EV trucks has been delayed until late 2025.

Despite the cancellation of the affordable EV platform, Honda and GM continue to collaborate on other projects. The Honda Prologue and Acura ZDX, electric crossovers, are still in progress and will share the same platform as the Cadillac Lyriq and Chevrolet Blazer. These vehicles will also feature Apple CarPlay and Android Auto, which GM controversially plans to eliminate from its cars starting in 2024.

Additionally, GM and Honda, along with BMW, Hyundai, Kia, Mercedes-Benz, and Stellantis, are partners in a new North American fast-charging network. The seven automakers aim to deploy 30,000 fast chargers in the US and Canada, beginning in 2024.

Furthermore, Honda recently announced another collaboration with GM. In 2026, Honda plans to launch a robotaxi service in Japan using the Cruise Origin, an autonomous electric vehicle developed by the GM-backed AV company. However, this latest development may face challenges following the news that California has suspended Cruise's permission to operate AVs after a tragic incident involving a pedestrian in San Francisco.