GM, Honda Scrap $5B Plan to Make Cheaper EVs

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Honda Motor and General Motors (GM) are scrapping a plan to jointly develop affordable electric vehicles (EVs), the companies said Wednesday, just a year after they agreed to work together in a $5 billion effort to try to beat Tesla in sales.

The decision underscores GM's strategic shift to slow the launch of several EV models to focus on profitability, as it grapples with the rising cost of United Auto Workers strikes, which surged to $200 million a week this month."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 a joint statement.

GM CEO Mary Barra said Tuesday during an earnings conference call that the U.S. automaker was shifting its EV push from efforts in the entry-level segments, that included a $5 billion commitment over the next several years to GM's Bolt EV. A spokesperson confirmed she was referring to the Honda EV partnership.

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 U.S. state.

 

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Honda, GM scrap plan to co-develop cheaper EVsHonda Motor (7267.T) and General Motors (GM.N) are scrapping plans to jointly develop affordable electric vehicles (EVs), a Honda spokesperson said on Wednesday, confirming a Bloomberg News report.
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