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Honda Motor Co Plans to Partner with Electronics Giant Sony on a New Electric Vehicle Joint Venture

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【Summary】​Japan’s Honda Motor Co and electronics company Sony have signed a memorandum of understanding (MoU) to establish a new joint venture company to develop and sell electric vehicles and provide mobility services. The agreement would see a legacy automaker developing high tech electric vehicles with a company outside of the auto industry. iPhone maker Apple Inc is seeking a similar partnership for its rumored "Apple Car" project.

Eric Walz    Mar 04, 2022 10:00 AM PT
Honda Motor Co Plans to Partner with Electronics Giant Sony on a New Electric Vehicle Joint Venture
Sony Chief Executive Kenichiro Yoshida shakes hands with Honda’s Toshihiro Mibe at a joint news conference in Tokyo, Japan, March 4, 2022. (PHOTO: Reuters/Kim Kyung-Hoon)

Japan's Honda Motor Co and electronics company Sony have signed a memorandum of understanding (MoU) to establish a new joint venture company to develop and sell electric vehicles and provide mobility services. The agreement is one of the first of its kind in the industry and would see a legacy automaker developing high tech electric vehicles with a company outside of the auto industry.

The two companies will proceed with negotiations with the goal of reaching binding agreements by the end of the year, pending regulatory approvals.

As the auto industry moves towards electrification, mechanical systems in vehicles are being replaced with electrical components. Modern vehicles are essentially becoming smartphones on wheels packed with electronics.

Honda's joint venture with Sony pair's the automaker's manufacturing strength and after sales experience with Sony's expertise in the development and application of imaging, sensing, telecommunication, network, and entertainment technologies, all of which will be included in future vehicles, including those capable of autonomous driving.

"The New Company will aim to stand at the forefront of innovation, evolution, and expansion of mobility around the world, by taking a broad and ambitious approach to creating value that exceeds the expectations and imagination of customers," says Toshihiro Mibe, Director, President, Representative Executive Officer and CEO, Honda Motor Co.  "Although Sony and Honda are companies that share many historical and cultural similarities, our areas of technological expertise are very different. Therefore, I believe this alliance which brings together the strengths of our two companies offers great possibilities for the future of mobility."

Sales of the first EV model from Honda and Sony's new joint venture company are expected to start in 2025. 

As part of the MoU, the joint venture company is expected to plan, design, develop, and sell the EVs, but not own and operate manufacturing facilities. Although Honda is expected to be responsible for manufacturing the first EV model at one of its state-of-the-art manufacturing plants. While Sony is expected to develop a mobility service platform for the vehicle.

"Sony's Purpose is to ‘fill the world with emotion through the power of creativity and technology," said Kenichiro Yoshida, Representative Corporate Executive Officer, Chairman, President and CEO, Sony Group. "Through this alliance with Honda, which has accumulated extensive global experience and achievements in the automobile industry over many years and continues to make revolutionary advancements in this field, we intend to build on our vision to ‘make the mobility space an emotional one,' and contribute to the evolution of mobility centered around safety, entertainment and adaptability."

Sony's joint venture with Honda is exactly what Apple wants to do in the automotive space with its long rumored "Apple Car" project, which will bring the iPhone maker's innovative technology into an electric vehicle. Apple is currently looking for an automotive partner to help make its Apple Car vision a reality. 

Apple was also in talks last year with Toyota for building its Apple Car, but no deal was reached. 

Apple's contract manufacturer Foxconn, alos plans to enter the electric vehicle space. In Oct 2021, Foxconn unveiled three electric vehicle prototypes at its annual Technology Day event in Taipei. The three vehicles are designed for mass production. However the reference designs of the vehicles allows EV companies to customize the vehicles to their own specifications. 

The three EV prototypes are based on the designs of the MIH Consortium, a Foxconn-led open software and hardware platform. The open hardware and software platform is called the "MIH EV Open Platform." It includes an EV chassis, electronic architecture and support for autonomous driving. 

The goal of the MIH Consortium is to reshape the traditional automotive supply chain by developing " electronic kits" for automakers that combine all of the necessary hardware and software to shorten development timelines and lower the costs of fully-electric vehicles.

Foxconn aims for its electric vehicle production to become a $35 billion business by 2026. The company's Chairman Young Liu said to news outlet Nikkei Asia that Foxconn's $35 billion target is a goal it "must achieve".

Ford Motor Co is also moving to develop a connected mobility ecosystem for its future EVs and poached a key executive from Apple.

In Sept 2021, Ford announced it hired industry veteran Doug Field from Apple as its chief advanced technology and embedded systems officer. At Apple, served as VP, Special Projects, which was rumored to include "Project Titan'', the codename for the secretive Apple Car project. Prior to joining Apple, Field was Senior Vice President of Engineering at Tesla. 

Any deal with Apple to build an EV would be similar to the joint venture of Honda and Sony. Depending how successful the new joint venture is, its could also pave the way for other automakers to form partnerships with electronics and semiconductor companies to develop connected and autonomous EVs with 5G connectivity that will come packed with technology.

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