In this episode of Electric Car watch, we will talk about the American car giant, FORD, and their plans for EVs. Ford held a presentation called ‘Delivering Ford+,’ during which they highlighted a new strategy centered around electric vehicles, a new dedicated commercial business, and connected services. In this presentation, FORD announced it’s electrification plan with a goal of 40% of its sales being all-electric by 2030.
Honda's Weak EV Goals
Honda in April this year announced that by 2030, 40% of the Japanese carmaker's vehicles in major markets will be powered solely by electric batteries or fuel cells -- EVs and FCVs. By 2035, Honda expects to double this percentage to 80% and by 2040 all its cars globally will be either EVs or FCVs. Honda will spend a total of $46.3 billion on research and development in the coming six years.
So this is what Honda plans to do. In 2024, Honda will launch a “production” electric car mostly in the North American and Japanese market. They plan to leverage their partnership with GM and use GM’s Ultium drive platform. After 4-5 years of using GM’s platform, Honda will get serious in 2026 and will launch a series of new EV models which will use, “e:Architecture”, a completely new EV platform created by Honda.
Wow, so after all that hullabaloo, Honda will launch a grand total of one electric car in 2024. Wow. Now ask yourself this question. By 2024, how many cars will Tesla sell
world wide? How many electric cars will BYD sell? Those numbers will be in the millions. Meanwhile Honda has announced a capacity of 70,000 electric cars in 2024. It'd be funny if it wasn't so pathetic. BYD sells around 70,000 electric vehicles in China in one month. And by 2024, Tesla and BYD will absolutely disrupt Honda’s market.
And Honda does not even have their own Electric car platform. The 2024 “production” car will use GM’s Ultium platform which is similar to Volkswagen’s modular electric drive matrix, also known as its MEB platform, which we spoke about in Episode 2 of Electric Car watch. The link is in the description.
Guys, whenever Japanese companies like Toyota and Honda showcase projections that are 19 or 20 years away, I just have to laugh. They seem to have a sunk cost bias when it comes to their investment in Hydrogen vehicles, that no one is buying. I believe the free marketplace will give Honda a harsh wake-up call later this decade. They've misjudged the speed of EV technology innovation and the speed of cost reductions. I can clearly see Honda getting forced by the market to accelerate these projections. Essentially they are slow-walking through this phase. This plan from Honda is absolutely pathetic.
We watched the presentation by Toshihiro Mibe, CEO Honda Motor Co on Honda’s plan for EVs. In the entire presentation he seemed defeatist whenever he spoke about EV’s. All the time he was like - “It's a huge challenge. We have 20 years, and we need to do our best.”
I'm sorry, but what is he talking about? For Mr Mibe, even a 2040 all EV target seems challenging. On top of that when a journalist asked him about battery production. He was not sure and is still not sure about cell manufacturing. On top of that Mr Mibe threw out typical choice anti EV news bites - how batteries are expensive, how they catch fire, etc. While this may have been true 5-8 years back, Mr Mibe absolutely does not want to see the reality of how battery tech has improved over the last 5 years and how it will dramatically improve by 2030. On top of that Honda is thinking of creating an EV platform only after 2025 while companies like VW, BYD and other car companies already have high voltage EV platforms today.
Mr Toshihiro Mibe is another typical Japanese CEO in denial when it comes to EV’s. These are the kind of people that will ensure Honda’s time will be over by 2030.
Honda Two Wheelers
In the two wheeler space, where people in many Asian countries use a large number of their products, Honda has set up a consortium with Piaggio, KTM AG and Yamaha Motor Co. to encourage the use of swappable batteries for electric motorcycles and light electric vehicles. Honda said they will engage with various decision-makers, to help create an International set of technical standards for swappable battery systems and light electric vehicles.
We like Honda's Idea of creating battery swapping specifications. But the progress and plan are very slow. Apparently Honda will launch 3-4 two wheeler models in Asian markets by 2025. By then it will be too late. Hondz absolutely has no clue on how his 2 wheeler market space will be captured by Indian startups in India and Chinese startups in Asia.
Honda will gift their car market share to competitors
Back to cars. In 2020 Honda sold 4.6 million vehicles. And Mr Toshihiro Mibe is saying by 2030, only around 5 lakh vehicles will be electric. In other words, Honda intends to sell 4.1 million ICE vehicles in 2030. And as discussed in my Toyota video, by the 2030’s ICE vehicles won’t be accepted in Europe and China. ICE vehicles will cost more to manufacture and sell. Demand for ICE vehicles will plummet.
But Mr Toshihiro Mibe wants to shove millions of ICE cars down people's throats?
Not a chance.
If you are Tesla or NIO or VW or XPENG or BYD or Tata Motors, this is the right opportunity to eat into Honda’s market share.
“Please Honda. Continue down this path and hand us your market share! We will gladly take it”
Here is a comment in NY Times on slow EV strategy by Japanese automakers like Honda.
We had so much hope from companies like Honda. The Honda E, a short-range electric vehicle, is such a beautiful car. When I first saw it, I thought it looked like the classic Maruti 800 for the new century. If they updated the car and actually had the will to sell the Honda E, they would do very well. But Honda is not interested. Ultimately, the Honda E is only a compliance/PR electric car launch. Honda are only selling limited numbers in Europe. But this does show that Honda can make great electric cars. Unfortunately their senior management is totally in the pockets of BIG OIL. Their reluctance to make the leap to all-electric vehicles could lead them to suffer the same fate as Japan's consumer electronics firms, which have largely faded into irrelevance because of their failure to stay ahead of market trends.
What about Honda electric cars in India, you ask?
What a joke! Honda India will continue to dump pollution cars in India even after 2030. I see no Honda electric cars ever coming to India in the next 10 years as they will be busy fighting to stay alive at that point.
Thanks guys for watching. Do write in the comments below on your observation and research you may have done on Honda’s EV plans.I will see you next week, when we talk about the electric car that is beating Tesla in sales.