December 4, 2022

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Japanese car giant Honda is targeting expansion in the field of electric cars and allocating billions for research and development

Japanese car giant Honda is targeting expansion in the field of electric cars and allocating billions for research and development

With many major economies looking to reduce the number of diesel and petrol cars on their roads, Honda and other automakers are trying to develop electrification strategies that will allow them to stay competitive in the future.

Emore Kate | Istock editorial | Getty Images

Honda It plans to invest about 5 trillion yen ($39.9 billion) in electrification technologies and software over the next 10 years, as the Japanese auto giant aims to launch 30 electric car models worldwide by 2030.

Nearly 3.5 trillion yen will go to research and development expenditures, with 1.5 trillion yen focused on investments, the company said in a statement on Tuesday.

Honda has said it will target electric vehicle production of more than 2 million units a year in 2030. It said its total budget for research and development expenditures in that time frame will come to nearly 8 trillion yen, or roughly $63.9 billion.

When it comes to production, Honda said it would look to set up what it called a “dedicated electric car factory” in the Chinese cities of Guangzhou and Wuhan. The company said it is also planning a production line for electric vehicles in North America.

On the North American battery front, the company has to “purchase Ultium batteries from GM. Separately, apart from General Motors, Honda is exploring the possibility of creating a joint battery production company.”

Just last week, Honda and General Motors They announced that they will develop a series of affordable electric cars Based on a new global platform.

Read more about electric cars from CNBC Pro

With many major economies looking to reduce the number of diesel and petrol cars on their roads in the coming years, Honda and other automakers are trying to develop electrification strategies to enable them to keep up with new regulations and stay competitive.

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last month, for example, stronghold It outlined plans to roll out three new passenger electric cars and four new commercial electric cars in Europe by 2024, The company said it expects to sell more than 600,000 electric vehicles annually in the region by 2026.

March 2021, Volvo cars He said she plans to become All-electric car company by 2030.

in another place, BMW Group She said she wants fully electric cars to account for at least 50% of deliveries by 2030.

These goals will put these companies in competition with Elon Musk TeslaWhich produced more than 305,000 cars in the first quarter of 2022.

Another automaker with plans for electrification is Mercedes Benzwhich previously said it would “be fully electrified at the end of the decade, market conditions permitting”.

On Monday, the company held an ESG Conference for Analysts and Investors. Among other things, it said it wants to cover more than 70% of its energy needs with renewables by 2030.

It said it would achieve this by “introducing solar and wind energy” on site as well as entering into further power purchase agreements.

In an interview with CNBC’s Annette Weisbach this week, Ola Kallenius, CEO of Mercedes-Benz Group, laid out some of the ideas behind his company’s strategy.

“The good thing about investing in renewables, especially renewables in high-yield areas, is that if you look at the cents per kilowatt-hour once it goes live, many of these options are actually less expensive than fossil-based ones,” he said.

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Kallenius added that investing in renewables is a “good job”.