Honda Electric Vehicles: What's Up With the Slow (and Slowing) Roll?

A few years ago, the auto industry was on a frenetic tear to introduce electric vehicles, convinced the transition was imminent. Many of the Japanese automakers, Honda included, were slow to make the move, relying instead on their prowess with hybrids. As the fervor for EVs subsided and forecasts and timelines were adjusted, Honda’s seemingly uncompetitive position could be viewed as more asset than liability. And, as you'll see after reviewing Honda's initial plans, that hesitance is perhaps paying off—as the company is scaling back some expectations of its electrification. But, first, here's what it was planning:

But while the timeline was in question, the inevitability of the march to an all-electric future was not. To get into the space, Honda forged a partnership with GM to get its first two EVs onto the market: the 2024 Honda Prologue and Acura ZDX SUVs. While designed by Honda, they use GM’s Ultium platform and are built by GM.

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Meanwhile, Honda engineers were at work on a dedicated electric vehicle architecture, and we are starting to see the fruits of those labors. The Saloon and Space-Hub concept offer the first look at the 0 Series family. The Saloon sedan will go into production in 2026 in Ohio and the flagship will be the first of seven vehicles to launch by 2030. Honda global CEO Toshihiro Mibe is quick to stress the 0 Series is 100 percent Honda technology and production, with in-house battery production in partnership with LG Energy Solution.

The GM arrangement is a bridge to the 0 Series, and a subject that Honda executives in Japan did not want to talk about, other than to say the two automakers continue to have discussions and work together on fuel cell vehicles with a facility in Michigan. Honda also has a partnership with Sony and will build the Sony Afeela EV at its Ohio EV Hub in 2026.

First Step: Honda 0 Series

The 0 Series is critical to Honda meeting its target of 40 percent EVs in 2030 and for all global sales to be battery electric or fuel cell EVs by 2040. Financially, Honda aims for a 5 percent return on sales for its EV business as of 2030.

Honda is navigating the difficult transition to EVs by going step by step. It starts with introducing EVs at the retooled EV hub in Ohio, followed by new plants in Ontario that will come online a few years later.

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The 0 Series are on Honda’s new dedicated EV architecture. It is a zone architecture with a central ECU or brain for core dynamics, vehicle electronics and energy management, another ICU for the digital UX, and a third for the ADAS systems. Honda developed a new high-speed operating system to gather and analyze data to deliver vehicle functions.

The batteries will come from a joint venture plant with LG being built in Ohio where the Marysville vehicle assembly plant will make the vehicles. The Anna Engine plant in Ohio will make the battery case that is part of the vehicle structure.

Will Honda’s EVs Be Profitable?

Honda executives say the first EVs do not have to be profitable, but the total lineup will be with component sharing, economies of scale, and aftermarket initiatives. The business case for EVs in the future will be different from the business case for vehicles now, and the value EVs create will also be different, Mibe says. With conventional ICE vehicles, larger models reap larger profits. But because batteries account for 30-40 percent of the cost, larger vehicles with bigger batteries can be less profitable, the industry has learned.

Honda is looking at battery materials and production efficiencies to bring the cost down. And like other automakers, Honda eyes the aftermarket as a profit stream, especially as software-defined vehicles make it possible to charge extra or offer subscriptions for features and services.

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Affordable EVs Must Wait

Honda and GM had planned to work together on a line of affordable EVs, but those plans have been cancelled. Honda plans to address affordable EVs at an undetermined point in the future, but it will be done in-house and awaits lower-cost technology, such as solid-state batteries. It is the high cost of batteries that is the problem, says Shinji Aoyama, global officer in charge of electrification for Honda. The business case is not there yet.

Solid state batteries were originally thought to be viable for 2025. Honda then pushed the projection out to 2030. Research and development is being done in Tochigi where Honda has a plant doing pilot production for testing. Getting the chemistry right to produce solid-state batteries at the low cost needed is proving difficult. There are no plans for mass production yet, says Toshihiro Akiwa, vice president and head of Honda’s BEV development center, planning unit, and electrification business development operations.

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Second-Gen Honda EVs Coming in 2028

Real savings will be realized by the second generation of EVs, which will be assembled at a new dedicated plant in Alliston, Ontario, starting in 2028. The Canadian operation will have an adjacent battery plant, and a pair of joint venture plants with suppliers to provide the battery plant with cathodes and separators. The battery plant will begin by making lithium-ion batteries but will transition to solid state when the technology is ready, allowing the vehicle assembly plant to make more affordable EVs.

The Canadian operation, with the latest in flexible and efficient manufacturing, will reduce production costs by 35 percent, executives say.

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Honda is following a different strategy and using a different EV platform and supply chain for China than the rest of the world because the market in China is unique and moving quickly. The automaker will introduce 10 Honda-brand EVs by 2027, part of the Ye Series. EVs will be 100 percent of Honda’s auto sales in China by 2035.

And Now... Honda's Slashing EV Investment, Prioritizing Hybrids

Seven months after this initial story was published, Honda announced on Tuesday it will cut back on EV investment, citing slowing demand. Whereas before it predicted EVs would account for 30 percent of sales by 2030, now it projects those figures to be 20 percent instead. It has reduced its planned electrification and software spend by 30 percent accordingly, and will prioritize hybrid models as an alternative.

Globally, Honda aims to launch 13 next-gen hybrids by 2031, according to Reuters. Currently, there are only three hybrid models for sale in the United States: the Civic, Accord, and CR-V. A plan for hybridizing its larger cars soon—supposedly such as the Passport, Pilot, and Ridgeline—is in the works. The Odyssey minivan is another natural recipient of such technology.

This report comes on the heels of an earlier one where Honda said it would pause construction plans of the new EV-dedicated plant in Ontario for at least two years. Yet, the automaker still holds firm that by 2040, 100 percent of its global sales will either be battery-electric or fuel-cell EVs.

This story was originally published in October 2024, and has since been updated to reflect changes in Honda's electrification strategy going forward.