Honda, GM scrap US$5 billion plan to co-develop cheaper EVs

The decision underscores GM's strategic shift to slow the launch of several EV models to focus on profitability, as itThe US automaker on Tuesday withdrew its previous 2023 profit outlook.

"After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market," the companies said in the joint statement.GM CEO Mary Barra on Tuesday during an earnings conference call said the US automaker was shifting its EV push from efforts in the entry-level segments, that included a US$5 billion commitment over the next several years to GM's Bolt EV.

The automakers had said the deal was for"affordable" EVs, including compact crossover vehicles, built using GM's Ultium battery technology. A Honda spokesperson said its separate partnership with GM and its Cruise unit would not be impacted by a recent safety incident in California which led to a suspension of the robotaxi firm's driverless testing permit in the US state.

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