Splitsville: Honda and GM Are Officially Breaking Up
Breaking up is hard to do. Honda and General Motors are officially calling it quits after the brands planned to partner on the development of new electric vehicle nameplates. So, what went wrong? Why are Honda and General Motors no longer working together? Here’s why the Honda-GM partnership won’t make it into 2024.
What went wrong with the Honda-GM EV partnership?
According to Reuters, the Honda-GM EV partnership is officially dead. The 5 billion dollar plan was initially introduced about a year ago. The gist was that the two brands would share resources to develop electric vehicle platforms with similar qualities. Toyota and Subaru successfully executed a similar partnership, developing the Toyota bZ4X and Subaru Solterra. So, why couldn’t Honda and GM do the same?
There are millions of reasons why the partnership couldn’t work out, but one reason stands out among the pack. Profitability. Electric vehicles aren’t nearly as profitable as internal combustion engine vehicles for established legacy automakers that are just beginning to explore the space. Tesla, on the other hand, seems to be raking in the dough. Tesla is mastering the mass production of its most successful EV nameplates, the Tesla Model Y and Tesla Model 3.
Honda and General Motors will focus on more profitable nameplates rather than electric vehicle platform production. That said, profitability isn’t the only reason the two brands have nullified their partnership. General Motors faced serious scrutiny after the Chevrolet Bolt EV and EUV mass recalls. Would you want to partner with a company on the development of an electric vehicle platform if one of their best-selling EVs had a tendency to go up in flames?
Though neither brand may make an official statement as to why they are no longer partners, the writing has been on the wall for months. So, what are the implications of this breakup on the market?
What does the breakup mean for the future of affordable EVs?
General Motors is much further ahead of Honda in the race to create the most impactful electric vehicle nameplate. In fact, Honda has yet to produce any lasting, impactful, fully electric model for the American market. GM, on the other hand, has several electric vehicles on the horizon across its portfolio of brands. Several of these EV nameplates have the potential to make a serious impact on the market due to pricing.
Honda could get the short end of the stick with the conclusion of the GM partnership. General Motors is unlikely to lose much steam in its mission to produce excellent electric vehicles. At least in regards to the end of this EV partnership, shifting priorities from EVs back to ICE vehicles is another story.
What are Honda and GM’s plans?
Honda CEO Toshihiro Mibe announced that Honda is ending the development plans for an affordable EV. So, the brand still has long-term aspirations to contribute to the EV market, but not any time soon. Instead, a Honda electric vehicle will take much longer to hit the scene.
General Motors still plans to produce new EV nameplates that have already been announced. However, production dates are already being pushed back. So, both Honda and General Motors will take longer to produce electric vehicles than they originally anticipated. This is a bummer for drivers and an indication that dark days are coming as businesses tighten their belts. Is the Golden Age of electric vehicles over before it even really started?