On April 12, Honda held a press conference attended by Toshihiro Mibe, Director and Representative Executive President Toshihiro Mibe, Director and Vice President of The Executive Vice President Takeuchi, and Shinji Aoyama, Executive Director, to announce the latest initiatives in the field of pure electric vehicles.
01. Initiatives related to the electrification business
Honda aims to provide a strong supporting power to everyone in the world who has the will to act, expand people's possibilities, and realize the joy of free movement with zero environmental load.
Lay a solid foundation for your career
Over the years, Honda has been conducting its business with the principles of "consolidating the foundation of its business" and "preparing for future growth," and is gradually achieving results in various areas of products, businesses, and new technologies.
The automotive business system has steadily improved, and as of now, the number of derivatives of global models has been reduced to less than half from 2018 (the goal is to reduce it to one-third by 2025).
In terms of production costs of automobiles, we will accelerate this initiative by "consolidating the business foundation" by reducing the cost by 10% compared with 2018, and investing it in "electrification" and "preparation for future growth.".
A solution unique to Honda
In order to achieve carbon neutrality through all-domain products and corporate activities by 2050, Honda is committed to promoting the carbon neutralization of power sources for its products in all fields as the world's largest powertrain manufacturer with an annual production capacity of 30 million units in the motorcycle, automotive, power products, outboard and aircraft sectors. To achieve this, we believe that a multifaceted, diversified solution is needed, rather than simply replacing the engine with a battery.
In addition to the electrification of vehicles, we also provide a variety of solutions for customers in different countries and regions on demand, including the use of exchanged batteries and hydrogen fuel cells for different modes of travel.
In addition, Honda will improve the convenience and operational efficiency of society as a whole by connecting their CONNECT platform.
Organizational structure changes
From the existing organizational structure divided by motorcycles, automobiles, and power products, we separated the "electric products and services, batteries, energy, mobile power packages, hydrogen fuels" with future core competitiveness, and the "software and networking field" associated with this, and merged them into a new organization "Business Development Headquarters". This increases flexibility and enhances cross-domain collaboration of products.
02. Initiatives related to the electric vehicle business
Battery procurement solutions
An important issue in the era of pure electric vehicles is the global battery procurement plan, and we will promote related work based on the following two points.
At this stage: by strengthening external partnerships for liquid lithium-ion batteries, we will ensure stable procurement in each region.
North America: In addition to General Motors (GM), which is purchasing "Ultium platform" batteries from General Motors (GM), we are studying the establishment of a joint venture for battery production
China: Further strengthening cooperation with CATL
Japan: Procuring batteries from Envision AESC for light electric vehicles
The second half of 2020s: Accelerate the independent research and development of a new generation of batteries
Decided to build a demonstration production line for all-solid-state batteries currently under development, with an investment of about 43 billion yen, to start operations in the spring of 2024, and to use it in the models launched in the second half of 2020s
Launch of pure electric vehicles
The specific pure electric vehicle launch plan is as follows.
From now until the second half of 2020s: Products are launched according to the characteristics of the market in each major region
North America: Launch of two medium- and large-sized pure electric vehicles jointly developed with GM in 2024 (Honda brand: new SUV "Prologue", Acura brand: SUV model)
China: Launch 10 pure electric vehicles by 2027
Japan: Commercial light and pure electric vehicles priced at around 1 million yen will be launched in the first half of 2024, after which the company plans to launch individual-oriented light electric vehicles and SUV pure electric vehicles in due course
The second half of 2020s: The world enters the period of pure electric vehicle popularization, and will launch the highest quality electric vehicles in the world.
From 2026 onwards, the product will be launched with "Honda e: Architecture", which is a pure electric vehicle-specific platform that combines various hardware and software platforms.
Through the cooperation with General Motors (GM), after 2027, the North American market will launch a commercially available Volkswagen model that is on the same level as conventional fuel vehicles in terms of cost and range.
Through the above initiatives, the company plans to launch 30 electric vehicles from light commercial to flagship levels worldwide by 2030, with an annual production volume of more than 2 million units.
Production system
In terms of the production system of pure electric vehicles, in addition to Wuhan in China, we also plan to build a special plant for electric vehicles in Guangzhou
It also plans to build a dedicated production line for pure electric vehicles in North America
03. Strengthen the field of software and networking
When it comes to electrification, our goal is to push the boundaries of individual products and deliver greater value through the cross-domain interconnection of various products.
To this end, we position electric mobility scenarios and products as terminals, and since the technologies and frameworks that connect the energy and information accumulated in each product with users and society are crucial, we will focus on creating cross-domain interconnected platforms to create value.
In order to accelerate development in the future, we will strengthen the use of external resources and significantly improve our development capabilities in the fields of batteries and other electric vehicles, as well as in the fields of software and networking.
In addition, in this area, we will actively carry out cooperation, alliances and venture capital between different industries to play a synergistic role.
04. Formulate financial plans to support the transformation of business
Honda's current business is entirely based on the sale of hardware, and we will transform our business portfolio by integrating hardware with software while promoting electrification, expanding our relationships with customers and business scope. In addition, after 2030, we will strengthen our compound solutions business and business in new areas. In order to achieve these changes, we have been making efforts to "lay a solid foundation for our business".
Improve the revenue structure
In addition to consolidating the business foundation due to the severe business environment caused by the COVID-19 pandemic and the shortage of semiconductors, we have also improved our business structure through comprehensive fee reductions. We believe that through unremitting efforts, it is possible to achieve the medium- and long-term goals previously set, so that the return on sales (ROS) can reach more than 7%. In addition, net cash balances remained at a good level of 1.9 trillion yen (as of the end of the third quarter of fiscal 2021).
Resource input and external financing for the next 10 years
Approximately 8 trillion yen will be invested in research and development. Approximately JPY 5 trillion (R&D expenditure of JPY 3.5 trillion and JPY 1.5 trillion) is expected to be invested in electrification and software.
Over the next 10 years, the company plans to invest about 1 trillion yen in "preparation for future growth," including "new fields" and "resource recycling."
For start-ups with advanced technologies and business models with future potential, we are actively investing about 10 billion yen a year to expand our technology and business scope.
Based on the idea of external financing on demand, green bonds totaling US$2.75 billion were issued in March this year. The funding will be used to develop and produce zero-carbon vehicles, such as pure electric vehicles and fuel cell vehicles, to further accelerate the realization of an "environmental zero-load society."
05. Sport models
In the process of challenging carbon neutrality and electrification, we will always uphold the original intention of continuing to provide customers with "FUN", and launch two sports models to the world, special edition and flagship version, even in the era of electrification, these two products still inherit Honda's unique handling fun, condensing Honda's consistent sportsmanship and unique personality.