GM sustained a serious blow this morning to its plans for bringing affordable compact crossover EVs to the U.S. market as its would-be partner Honda withdrew from the scheme.
Honda’s retreat from the project slams the brakes on an alliance between the two automakers that has been growing steadily stronger since 2013, Bloomberg reports.
Honda CEO Toshihiro Mibe stated in a TV interview that “this project itself has been canceled.” Mibe indicated the collaboration on the small EV crossover project at least was permanently ended, remarking that “GM and Honda will search for a solution separately.”
The powerful financial impact of the UAW strike on GM likely informed Honda’s decision, though Mibe did not confirm this in so many words. The United Auto Workers strike has cost The General in excess of $800 million to date, with an additional $200 million for every week the strike goes on beyond this point. The automaker now considers reaching its $14 billion profit goal for 2023 to be a dubious proposition.
Mibe said that cost is one factor affecting the Honda decision to back out of the small EV crossover collaboration. He also blamed difficulties in achieving the desired range for the vehicle. The Honda chief executive further said that “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.”
As we previously reported, GM and Honda intended to roll out the first of a line of affordable EVs together by 2027, using The General’s Ultium battery technology as the power source for the planned crossover.
CEO Mary Barra put considerable stock in a positive outcome to the project as a springboard to expanded EV acceptance, stating the two automakers “will share our best technology, design and manufacturing strategies to deliver affordable and desirable EVs on a global scale.” She added that “by working together, we’ll put people all over the world into EVs faster than either company could achieve on its own.”
The immediate objective of the now-scrapped joint effort was to rapidly cut battery costs and enable launch of EV models with a base price below $30,000. The American and Japanese companies had been dividing R&D costs for the project between them, lessening the burden on each. They were also collaborating on fuel cell and ICE vehicle projects. In addition, the two companies worked together to develop the Ultium-based Honda Prologue and Acura ZDX midsize electric crossovers, both going on sale in early 2024.
With Honda out of the picture, GM’s plans to develop a next-generation Chevy Bolt EV may become significantly more important. The new Bolt will not be a clean-sheet design, speeding up its development cycle considerably. The popular subcompact hatchback crossover EV will cost approximately 40 percent less to produce than the current model thanks to use of the Ultium architecture and Ultium Drive motor technologies.
Furthermore, the next-gen Chevy Bolt EV will use lithium iron phosphate or LFP batteries in place of the current nickel-cobalt-manganese-aluminum or NCMA cells, cutting costs even more and “getting to market at least two years faster” per Mary Barra.
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Comments
While the market absolutely NEEDS affordable options, the CUV market specifically seems WAY oversaturated right now.
Well, thanks UAW.
Exactly…with GM and Ford seeming to be open to unionizing battery plants, the EV’s will get more and more expensive.
That means that Honda was planning to use a GM plant to build their small suv.
So is that 2024 Honda Prologue D.O.A.? It was to use GM’s Ultium technology.
What did I say a long time ago? I called this as I worked for Honda for 12 LONG years and I know how they are. Way back when GM and Honda announced they would build both a Honda and Acura based off the Ultium platform, I was against it and said that Honda would use GM and take what they want with zero benefit to GM.
Seems like that is being confirmed in this article. Shame on GM for trusting Honda. I wouldn’t trust them, their cars or the people working for them for nothing. IMO, GM should pull 100% out of the two EV’s that they brought to the market for Honda and let them cry.
Man the hits just keep on coming for GM
When will leadership have to answer for these horrendous decisions and or execution of said plans?
I always defended her but it is time for new leadership with a modern vision and a true plan forward. This is becoming a colossal embarrassment for GM all around!!!
We will be bailing at least one of the Big Three by 2030 again. I will be floored if we the tax payers are not on the hook yet once again.
Glad my pension went to prudential.
Wow, one sharp blow after another today. Equinox EV delayed, partnership with Honda terminated, and EV targets missed.
Yep, it’s the best news day in the auto industry in YEARS! I hope they are learning and change course.
Oh maybe this is how they now plan to meet their 1 million of their own! NOT.
Within 6 months, dealers will be refusing EV vehicles. The market is getting tougher and EV interest is waning big time. The sold orders in the pipeline, ICE and EV, have thinned out drastically. Probably down 85% over this time last year.
My guess is a lot of orders in the pipeline were people who thought they would get the next new thing, then turn around and be able to sell it for a profit to someone else.
“Mibe said that cost is one factor affecting the Honda decision to back out of the small EV crossover collaboration. He also blamed difficulties in achieving the desired range for the vehicle. The Honda chief executive further said that “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.””
Its not the range stupid – its waiting hours to fill-up once its exhausted. Every vehicle produced since their inception has had a range – recently 300-400 miles. We just happen to be able to recharge – err.. refuel – them in a reasonable amount of time.
GM sure the charge rates are low, but if you consider the other manufactures the charge rates are under 20mins. Put chargers in state rest areas (bathroom), by the time you come out you have gained 100+ miles for the next stop. The GM setups are some of the slowest on the market (Bolt is 55kw max and a VERY picky charging curve meaning most of that is around upper 30’s), in the time my Bolt can go from 20-50% my M3 has gone from 10-80%
Look at the new Chevy Blazer EV range vs the Chevy Blazer 2.0L Turbo ranges. For $58,000, you get an EV Blazer AWD that averages around 288 miles of range in perfect conditions. If you only fill to 80% range, that is around 230 miles in perfect conditions vs spending $40,000 on an ICE Blazer that can easily get double the range on a full tank of gas.
My wife had a ’22 Blazer AWD with the 2.0L and it routinely got over 30mpg on the highway. We took it on a couple of long road trips (a 1500 mile trip from Michigan to Florida, and a 950 mile trip from Michigan to Massachusetts) and got over 30mpg without trying. Every time I would fill the tank, the display estimated that I had a range of 600-630 miles of range. A couple of times, I pushed it over 550 miles on one tank.
On the last trip from Boston to Michigan, I made it 530 miles before I decided to fill up in New York and grab some food. I made the last 420 mile leg on that tank of gas with about 100 miles of range left. If I had made that same trip in an EV Blazer, I would have needed to stop and charge at least 4-5 times which could have easily added a few hours to the already 13 hour long trip.
They maybe shiny new toys, but they are not ready to completely replace ICE vehicles yet, especially at their current costs.
When I fill up my gas tank it takes 5 min and i gain 400 miles of range.
“Its not the range stupid – its waiting hours to fill-up once its exhausted.”
You misunderstand. He’s saying that they couldn’t get good enough range out of the sub-$30k vehicle they were trying to design.
In other words, they couldn’t build a sellable product at the price point.
Even the unicorn (Robotaxi) got suspended in SFO, effective immediately.
Leaving the s**t company Honda out of this for now, let’s take a look at what’s happening overall. First, I would like to ask a question to both the EV haters and the EV lovers: Did anyone really think that EV sales was going to continue gang busters for an extended period of time? That’s just not realistic. The EV sales still continue to grow, just at a much lower pace than in the past 2 years.
Second: Does the media and everyone on here start to panic and scream when ICE sales begin to slide? It’s actually happening now with just a few models still selling very well and most waning. What would anyone expect when the auto loans interest rates are so high? When for the past 3 years buyers have been charged extremely high prices. When the average new car payment is now well north of $1,000. These are all real things, and it’s affecting the markets now.
Just like when ICE powered vehicle sales would go up and down over the years, we didn’t scream that it’s time to drop them and go back to horses and wagons. I think the media and others need to chill a little and let these things work out.
The Federal Government and quite a few states are trying to force the successful sales of EV’s before they are ready. They are talking about banning ICE vehicles by the mid 2030’s when we don’t have a sufficient charging network for those that are always on the road and those that can’t charge their cars at home.
They are using taxpayer dollars to put a $7500 “rebate” on EV’s which are still many thousands of dollars more expensive than a reasonably fuel efficient vehicle.
In a free market like the United States, the automakers should be focusing on making affordable vehicles that the lower-to-middle class can afford, but many are pushing EV’s that easily exceed $60,000-$100,000. The lease payment on a new 2LT AWD Blazer EV is over $900 per month with several thousand dollars down on a 10,000 mile/year lease with a GM discount. This is in the same market where you can get a fully-loaded Trax Activ for around $26,000 or a new Equinox for around $32,000. If the automakers continue to offer a mix of EV’s, Hybrids, and ICE vehicles, the market will tell them when we are ready to fully change to a new type of fuel. That is how a free market works. Instead, companies like GM are jumping in head first into the shallow end of the pool and saying that they will be 100% EV before 2030…it just isn’t smart unless you are a communist country.
@Dan B
Exactly.
Interest rates is what is hurting the Auto Industry as a whole.
There are so mane High Priced ICE pickup trucks sitting on lots right now.
How many consumers are gonna go get a loan at 7% interest for a 90K Pickup truck?
Most EV sales are currently being sold to owners who have 2 or more ICE vehicles. Not many folks are going all in with their one and only vehicle being a BEV. Sales will get tougher to come by. Just saw a story that about 40% of Tesla owners are trading in for ICE. People aren’t stupid.
Let Honda develop their own vehicles!!!!
The wheels are falling off the “all electric future” I would not be surprised to see battery and EV plants being cancelled soon.
The EV reality bubble is bursting. They were pushed too hard too soon and we all know it
Too many naysayers here. If the Israel crisis worsens, oil goes up and so will gasoline. Then we who have EVs and charge for free at our homes will be watching all of you crying!
Charge for free?
That’s in a fantasy land
Except almost all of your electricity in Puerto Rico comes from oil and natural gas, lol.
Not true! My electricity is from the Sun and it is free!
This administration has gone too far pushing EVs because of the climate change mongers within their midst. They have disregarded market fundamentals and caused manufacturers to divert financial resources into developing and making EVs. I am pro EV, I like the tech involved with electric vehicles, at the same time I respect market dynamics and am a realist. The market right now is not ready for EVs, the power grid is not ready for massive amounts of EVs out on the road as the energy production capacity just isnt there yet. Honda and gm canceling plans to develop EVs on shared platforms isnt a surprise. They see major problems ahead.
Yes! I can charge for free! Can you get free gssoline from the sky? And it is not a fantasy!