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HondaMotor (New York Stock Exchange: HMC) has scrapped plans to co-develop affordable electric vehicles with General Motors (New York Stock Exchange:GM) citing the “changing business environment.”
The first models of this project were planned to be launched in North America in 2027. However, citing cost and cruising distance challenges, Honda CEO Toshihiro Mibe told Bloomberg Television: “After studying this for a year, we decided this would be difficult as a business, so right now we are finalizing the development of an affordable electric vehicle. GM and Honda will look for a solution separately. “This project itself has been cancelled.”
Meanwhile, GM withdrew its 2023 guidance earlier this week due to uncertainty surrounding the United Auto Workers strike. The American automaker has been dealing with rising costs related to the work stoppage, to the tune of $200 million a week, on top of the $800 million it already owes.
The automakers partnered in April 2022 and agreed to create a new architecture based on GM’s Ultium EV battery primarily for small crossover sport utility vehicles. Honda and GM aimed to develop electric vehicles priced below GM’s planned $30,000 Chevrolet Equinox, similar future offerings from Honda, as well as models from Tesla and BYD.
