Honda Announces Plan to Invest $40 Billion Into Electrification Goals

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【Summary】The massive investment is to help the Japanese automaker phase out gas-powered vehicles by 2040 and to become carbon neutral.

Original Vineeth Joel Patel    May 23, 2022 6:25 AM PT
Honda Announces Plan to Invest $40 Billion Into Electrification Goals

Honda is one of the largest automakers in the world, but it has been slow to electrify its lineup. The Japanese brand doesn't sell a single all-electric vehicle in the U.S. At the moment, Honda has four electrified vehicles in its lineup, but with the recent discontinuation of the Clarity Fuel Cell (it's still available to lease throughout 2022) and, more recently, the Insight, 

Honda only has two electrified vehicles on sale in the U.S. Compared to other brands, the automaker is well behind. Honda is looking to change that with a massive investment of $40 billion over the next 10 years.

Honda Looks To Play Catch Up

The large amount of money will go toward coming out with 30 all-electric vehicles globally by 2030. By that time, Honda also hopes to be able to build 2 million electric cars annually. The overarching goal for Honda is to have electric cars account for 40 percent of its lineup by the end of the decade. To reach its goal, Honda claims that its short-term plan includes working with outside partners and its long-term plan involves developing its own technology in-house.

Unlike other automakers, Honda's first electric vehicle with the new investment will be an ultra-affordable electric vehicle with a price tag of roughly $8,000. We highly doubt a small electric car at this price point would be available in the U.S. 

The first electric vehicle's we'll probably see from Honda in the U.S. under the new plan will include the Prologue and an unnamed EV from Acura. Both of these vehicles are being developed with some help from General Motors using the American automaker's Ultium battery tech. Honda will also come out with two new electric sports cars around 2025 with one being a flagship model that will most likely replace the Acura NSX.

Honda's Getting Some Help

In addition to coming out with more EVs, Honda also announced that it will be spending approximately $343 million on a demonstration line that will come out in the spring of 2024 to produce solid-state batteries. Until then, Honda will source lithium-ion batteries from GM for EVs in North America.

"From 2030 and beyond, we believe that we will be entering into the full popularization period, and battery EVs will be commonplace," Mibe said. "We will have small, medium and large-sized platforms in place and cover all the segments with these three platforms."

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