In a surprising turn of events, General Motors and Honda have decided to part ways in their collaboration to develop affordable electric vehicles (EVs). This decision marks a significant shift from the initial plan announced just over a year ago, which aimed to create a range of compact electric crossovers powered by GM’s Ultium batteries.
While the two companies still have an agreement in place for the Ultium-based Honda Prologue and Acura ZDX SUVs, the broader partnership to create affordable EVs has been shelved. Honda revealed that after thorough research and analysis, both parties decided to end the development.
The initial collaboration was set to lead to the production of more affordable compact electric crossovers, with the first model expected to debut in the North American market in 2027. These vehicles would have utilized a shared platform, combining the expertise of both automakers to enhance vehicle quality and increase production efficiency. Some models were also planned for the global market, including regions like South America and China.
This decision comes on the heels of General Motors’ third-quarter earnings call, where the company faced some challenges in its electric vehicle ambitions. Slowing sales growth, rising labor costs, and an uncertain economic outlook led to the abandonment of the goal to build 400,000 EVs between 2022 and mid-2024. Additionally, the launch of the Chevrolet Equinox EV was postponed for a few months.
GM also faced delays in the production of certain electric models at its Orion Assembly plant in Michigan, raising concerns about the company’s ability to scale up the production of its battery-powered vehicles.
Despite these challenges, GM has some positive news on the horizon. The automaker is working on a next-generation Bolt EV, equipped with a more cost-effective lithium iron phosphate (LFP) Ultium battery pack. This move is expected to make the new Bolt EV more affordable than the outgoing Bolt EUV, which has a starting price of approximately $28,000.
In the ever-evolving landscape of electric vehicles, General Motors and Honda are both navigating uncharted territory. While their collaborative efforts on affordable EVs may have come to a halt, each automaker is now poised to pursue its own path in the pursuit of electrification. The future holds exciting developments for both companies as they continue to innovate in the rapidly expanding EV market.
