Honda is investing $40 billion over the next decade in a massive shift to electric vehicles

Honda is investing 5 trillion yen ($40 billion) over the next decade in research, including to achieve a major shift towards green electric vehicles, the Japanese automaker said on Tuesday.

The products and services under development will account for more than half of its 8 trillion yen ($64 billion) research and development budget at that time and will be tailored to each major market, the United States, China and Japan.

Efforts in North America will focus on the collaboration with General Motors Co., in which Honda Motor Co. is jointly developing two mid- to large-size electric vehicle models, slated for sale in 2024.

By 2027, also as part of its alliance with GM, Honda plans to offer an affordable electric vehicle that rivals petrol models in terms of performance and price.

Major automakers are accelerating electric car deals amid pressing concerns about climate change, while using new types of fuel, such as biofuels and hydrogen fuel cells.

Honda will launch 30 electric vehicle models globally by 2030, targeting production of more than 2 million vehicles a year, according to the maker of the Accord sedan, Asimo robot and Gold Wing motorcycles.

They will cover the entire model range, from tiny minivans to muscle sports cars.

“We will continue to deliver the driving pleasure our customers have come to expect from Honda,” said general manager Toshihiro Mibe.

In China, where the shift to electric vehicles is particularly bullish, Honda will launch 10 new electric vehicle models by 2027.

Toshihiro Mibe, president and CEO of Honda Motor Co., pauses during a news conference in Tokyo, Japan, Tuesday, April 12, 2022.

In Japan, a market dominated by gas-electric hybrids, Honda will start with small utility vehicles, such as delivery vans.

Companies are likely to be more open to such investments due to the Japanese government’s sustainable development goals, officials said.

A mini-EV model for commercial use in the 1 million yen ($8,000) price range will go on sale in Japan in 2024, while other EVs, including sport utility models, for consumers regulars will follow, they said.

By the end of the 2020s, Honda hopes to have a breakthrough on next-generation batteries.

It will also develop related software, as electric vehicles need charging infrastructure and could add features such as robotics and avatars.

Like other automakers, Honda has lost business during the coronavirus pandemic. But it forecast operating profit of 800 billion yen ($6.4 billion) for the fiscal year ending in March.

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