Honda ditches go-it-alone strategy to make safer move toward EVs

Honda ditches go-it-alone strategy to make safer move toward EVs
Honda Motor Co. CEO Toshihiro Mibe is leading the automaker into its transition to electric vehicles. (Shoko Takayasu / Bloomberg)

Honda Motor Co. has long eschewed strategic alliances, preferring to go it alone even as many carmakers have banded together to improve economies of scale. That strategy is changing as the Japanese automaker shifts more aggressively to electric vehicles.

“It will be extremely risky for Honda to push the move alone,” Chief Executive Officer Toshihiro Mibe said Tuesday. “It’s meaningful to form alliances, mass-produce and lower costs to make our business sustainable.”

Speaking to Bloomberg News in Tokyo, Mibe said the company is open to working with others in different industries when it comes to developing software used in EVs.

“Even if we make the electric cars, it’ll be extremely hard for Honda to develop software alone,” said Mibe, who helped lead R&D efforts at the company prior to becoming CEO in April. “Honda won’t hesitate to form alliances with companies that are strong in their field if that creates value promptly.”

Honda became the first Japanese automaker to state publicly it will stop selling gasoline-powered vehicles, setting a target to phase them out completely by 2040. Given that EV penetration in Japan is just 1%, there’s strong growth potential for early movers, with global sales forecast to climb sharply in the coming years.

Honda Manufacturing of Alabama is in Lincoln. (Honda)

Honda operates Honda Manufacturing of Alabama in Lincoln, the automaker’s largest light truck plant in the world, where it produces the Passport and Pilot SUVs, the Odyssey minivan and the Ridgeline pickup truck. It also produces the traditional V-6 gas engines that power the cars. It produces no electric vehicles at the Alabama plant.

In 2018, Honda was in talks with Alphabet Inc.’s self-driving car unit Waymo to develop autonomous vehicles, but those discussions collapsed over issues related to technology access and balancing the relationship. Honda invested in and partnered with General Motors Co.’s Cruise LLC instead.

Aside from collaborations with GM in areas such as battery technology, Honda has followed a staunchly independent path, particularly when compared with other Japanese automakers. That’s shifting under Mibe, though he wouldn’t disclose companies Honda may form new partnerships with.

“We still want to discuss with various companies in various fields,” he said. “I believe in creating new value by becoming partners with non-auto companies, so we haven’t narrowed them down.”

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