GM, Honda Partner to Develop Cheaper Electric Vehicles

Researched by Industrial Info Resources (Sugar Land, Texas)--General Motors Company (NYSE:GM) (Detroit, Michigan) and Honda Motor Company Limited (NYSE:HMC) (Tokyo, Japan) plan to codevelop more affordable electric vehicles (EV) on a global scale by utilizing GM's lower-cost battery technology, the two auto giants announced recently. Industrial Info is tracking $20 billion worth of project activity from General Motors worldwide, most of which is in the U.S. Honda accounts for $1.4 billion in activity worldwide, largely due to a major plant upgrade in Canada.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for a detailed list of GM projects, and click here for Honda projects.

The current total cost of EV ownership is viewed as a major barrier for adoption. But according to the Natural Resources Defense Council, "the upfront cost of EVs is expected to fall further with advances in battery technology and an expansion of domestic manufacturing ... Drastic reductions in battery costs are making EVs of various types and sizes cost-effective more quickly than was previously anticipated."

As of February 2022, the average transaction price for a new electric vehicle was $64,685, well above the average of $46,085 for all vehicles, according to data from Kelley Blue Book.

The automakers expect to produce millions of EVs starting in 2027, and will discuss "EV battery technology collaboration opportunities, to further drive down the cost of electrification, improve performance and drive sustainability for future vehicles."

General Motors seeks to have a production capacity of 2 million EVs globally by 2025.

The joint effort will take advantage of GM's Ultium battery cells, which are designed to reduce the cobalt content in its lithium-ion batteries by more than 70%. The mineral accounts for about a quarter of the total battery cost, according to the U.S. Department of Energy.

Through a joint venture with LG Chem (Seoul, South Korea), named Ultium Cells LLC, GM is almost finished with construction of a $2.3 billion grassroot battery cell-manufacturing plant in Warren, Ohio. First production is slated for August. Subscribers can click here for a detailed project report.

Meanwhile, GM is at work on building a $2.3 billion grassroot EV battery-manufacturing plant in Spring Hill, Tennessee. Completion is expected in late 2023. The 2.8 million-square-foot facility will produce battery cells for the company's Spring Hill Auto Assembly Plant, where a plant expansion to increase the EV production capacity is expected to be complete at the end of April. Subscribers can see detailed reports on the battery-manufacturing and expansion projects.

The timely completion of EV battery-manufacturing projects is key to automakers reaching their production goals for the mid-2020s, according to David Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry. For more information, see Industrial Info's February 7, 2022, article - Automakers Pledge to Electrify Transportation, but Will the Batteries Be There?

Honda is building out its EV infrastructure after focusing largely on hybrid vehicles, and hopes to phase out gasoline-powered vehicles in North America by 2040, with 40% of its sales in the region to be powered by batteries or fuel cells by 2030.

Honda's upgrade/retooling project at its auto assembly plant in Alliston, Ontario, is expected to kick off in mid-2023. It entails installing supporting equipment and systems to produce future electric vehicles. Earlier this month, the Ontario and Canadian governments each committed C$131.6 million (US$105.3 million) to Honda's C$1.38 billion (US$1.1 billion) investment in the project, according to CTV News. Subscribers can click here for the project report.

Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.