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Honda Signs Agreement with Hitachi for Electric Vehicle Engines

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【Summary】Honda Motor Company and Hitachi Automotive Systems have signed a deal to form $44 million-joint venture that will see both Japanese companies manufacture engines for EVs.

Original Vineeth Joel Patel    Jul 14, 2017 4:25 PM PT
Honda Signs Agreement with Hitachi for Electric Vehicle Engines

While other automakers are embracing an all-electric future, Honda is betting a lot of its future on its hydrogen fuel-cell technology. Earlier this year, the Japanese automaker teamed up with General Motors to expand its alliance in regard to the automakers' fuel-efficient tech. While the automaker is still focusing on hydrogen, Honda is starting to get into the electric-car segment, as well.

This February, Honda announced an electric variant of the Clarity sedan, which was one of the first fuel cell vehicles on the road, capable of traveling up to 80 miles on a single charge. Despite having a late start in the EV segment, Honda quickly updated its electric vehicle to have a range of 89 miles and Level 3 charging a few months ago. 

Honda, Hitachi Team Up To Help Promote EV Growth

Honda may not be at the forefront of EV tech, but the Japanese automaker has large plans for the future, which now includes developing engines for electric cars. According to Automotive News, Hitachi Automotive Systems and Honda have entered into an agreement that will see both companies create a $44 million joint venture to manufacture engines specifically for EVs. 

As the outlet claims, the venture will be referred to as Hitachi Automotive Electric Motor Systems, which was announced earlier this year, and will be led by President Noboru Yamaguchi. The venture will be headquartered in the Ibaraki Prefecture in Japan, reports Automotive News

The engines that Hitachi Automotive Electric Motor Systems will develop will be used in various fuel-efficient vehicles, including plug-in hybrids, gasoline-electric hybrids, and battery-electric vehicles, claims the outlet. The motors will create manufacturing and sales functions in multiple countries, which include Japan, China, and the U.S. 

Why The Partnership Is Important For Honda

Teaming up to create engines for fuel-efficient cars is a brilliant business decision for both companies, and especially Honda. The Japanese automaker, as outlined above, isn't a force to be reckoned with in the EV scene. Collaborating with Hitachi to make engines for other companies to use would help solidify its role as a supplier. 

"Producing motors is capital intensive, so rather than just manufacturing them for our own purposes, we would like to produce in large volumes with the possibility of supplying a variety of customers," Honda CEO Takahiro Hachigo told reporters earlier this February at a news briefing. "In pairing with Hitachi, we're hoping to tap into its expertise in volume production." 

The joint partnership will be split somewhat evenly between the two companies with Hitachi Automotive Systems owning 51 percent of the company and Honda owning 49 percent, reports Automotive News

Honda isn't just falling behind in the electric-vehicle segment, but also in the autonomous scene, as well. The majority of automakers are targeting 2020 as the date for the release of a fully self-driving car. BMW is lagging behind with a date of 2021, while Mercedes-Benz and Audi have plans for self-driving future by 2020. Honda recently announced that it's targeting 2025 as the date for its driverless vehicle. Either way you cut it, that's behind the majority of automakers. 

via: Automotive News

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