| 12:11 PM EST

GM, Honda to Partner on N. American Products

Broad partnership expands on 20-year-old history of collaboration
#Honda #GeneralMotors #tech

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General Motors and Honda have tentatively agreed to co-develop vehicle platforms and both piston- and battery-based powertrains for the North American market.

The companies say the alliance will span multiple unspecified model segments. Each company will market its version of the resulting vehicles separately.

Fast Start

GM and Honda will begin planning meetings immediately and expect to start engineering work early next year. GM President Mark Reuss predicts the partnership will deliver “significant synergies” and cost savings.

 

The companies say the partnership they envision also will delve into connectivity, production and purchasing collaboration.

Collaborating more closely on EVs makes especially good sense, particularly for Honda. The company, which lags its rivals in electrification, is just now introducing its first all-electric model, the “e” city car.

Honda e electric city car  (Image: Honda)

Honda lacks the financial firepower to go it alone in electrification. It shuns equity tie-up in favor of collaborations like the one announced today. Through the deals announced today, GM will benefit by having another carmaker to help its own electrification programs achieve economies of scale faster.

GM Momentum

GM has been marketing the all-electric Chevrolet Bolt for more than three and will launch the electric Cadillac Lyriq crossover vehicle and Hummer pickup truck in 2021. The company aims to add 20 EV models over the next five years and generate annual global EV sales of 1 million units by then.

GM expects to spend $20 billion on EVs and autonomous vehicle technologies by 2025. It is investing $3 billion to turn its Detroit-Hamtramck plant into an all-EV complex.

To power the vehicles built there, GM’s 50:50 venture with LG Chem is erecting a $2.3 billion battery plant scheduled to come online in 2022. The complex will make a high-powered battery dubbed Ultium said to be 60% more powerful than the lithium-ion batteries GM uses now in the Bolt. The new battery will debut late next year in GM’s upcoming Hummer electric pickup truck.

Old Friends

GM and Honda are no strangers, having begun their collaborative history more than 20 years ago. They have explored a variety of technologies, from fuel cells and next-generation EV batteries to “smart grid” strategies for an EV-rich future.

GM and Honda accelerated their partnership with the Cruise Origin shuttle program  (Image: GM)

More recently, the companies partnered in developing the Origin autonomous shuttle, which GM affiliate Cruise Automation unveiled in January. Honda is investing more than $2 billion in Cruise, which plans to use the vehicle when it launches a robo-taxi service in 2022.

And in April, the companies agreed to co-develop two EVs that will join Honda’s product lineup in the 2024 model year. Both models will ride on GM’s skateboard EV platform and use Ultium batteries. GM noted at the time that the deal would benefit GM’s scale and capacity utilization.

Bottom Line

The GM-Honda venture has great potential for both companies. Thanks to a relationship that has been expanding for decades, there’s a high likelihood of success.

This won’t be the industry’s last EV partnership. Carmakers will need more of these alliances as they grapple with the financial logistics of an inevitable industry shift to electrification that will take a decade or more to complete.

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