Honda and Toyota Scrambling to Find Funds to Develop EVs, New Tech

author: Vineeth Joel Patel   

Look at Honda and Toyota, which are two of the world's largest automakers, and something becomes clearly abundant: neither have any fully electric vehicles in their respective lineup. Toyota may have been one of the first to champion hydrogen cars and a hybrid powertrain, but the brand has vocally been against EVs. Honda, on the other hand, is a bit of an anomaly, as it has made strides in focusing on next-gen batteries, but still doesn't have any EVs on sale. It looks like both have finally changed their tune and are now looking to focus on electric vehicles.

Scrounging To Be Competitive

In a report, Reuters outlines how both Toyota and Honda are racing against the clock to find money to pour into developing electric cars and ride-sharing services to be more competitive. Both automakers are taking different routes to find the necessary money to do so, though. Toyota will apparently attempt to save pennies wherever possible, while Honda will "strip down its vehicle lineup" in an effort to bring production costs down.

"We still weren't able to improve our costs enough last year," said Toyota CFO Koji Kobayashi. He also added that the large amount of investment required to focus on new tech and associated R&D costs made cutting costs wherever possible difficult. "We need to work to find new ways to reduce costs this year," said Kobayashi. Saving money will come from all avenues, including producing low-cost prototypes to, this may be hyperbole, "limiting the number of pencils employees use at any given time."

Traditional Automakers Need New Business Plans

Instead of attempting to find money in any way possible, Honda's plan is a little more conventional. The Japanese automaker will reduce the number of car model variants it has by two-thirds by 2025. This, as Reuters states, will reduce global production costs by 10 percent. The savings that result from the effort will be channeled to advanced research and development.

"We recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined," said Honda CEO Takahiro Hachigo.

The auto industry's sharp turn toward favoring electric cars, autonomous vehicles, and ride-sharing efforts has left some traditional brands on their back foot. New companies have emerged and thrived, as they look toward the future of cars and consumers' preferences. Sticking to the old-school way of doing business won't fly anymore.

"Merely depending on the business model of the past will not lead to the future," said Toyota President Akio Toyoda.

Vineeth Joel Patel

Joel Patel has been covering all aspects of the automotive industry for four years as an editor and freelance writer for various websites. When it comes to cars, he enjoys covering the merger between technology and cars. In his spare time, Joel likes to watch baseball, work on his car, and try new foods