GM's Plan To Make Sub-$30K EVs With Honda Is Not Happening Anymore

Japanese automaker Honda Motor Co (NYSE:HMC) is reportedly scrapping its plans to develop affordable electric vehicles with Detroit-based General Motors Co (NYSE:GM).

What Happened: Honda is not moving forward with its plans to produce budget-friendly EVs in conjunction with General Motors, company CEO Toshihiro Mibe said in an interview with Bloomberg. The CEO pinned the decision on it being “difficult as a business.”

"GM and Honda will search for a solution separately. This project itself has been canceled," the CEO said, as per the report.

In 2022, the two auto giants agreed to collaborate on creating a new series of EVs based on GM's Ultium EV battery and positioned at a price point lower than GM’s proposed $30,000 Chevrolet Equinox EV. The first of the vehicles was then expected to roll out in 2027.

GM Scales Down EV Targets: During the company’s third-quarter earnings call on Tuesday, GM individually also withdrew its EV production targets. This included both the 100,000 EV target the company had set for the second half this year as well as the cumulative 400,000 target the company had set for from 2022 to the first half of 2024. The company did not provide new targets.

“We are not providing new targets, but are moving to a more agile approach to continually evaluate EV demand and adjust production schedules to maximize profitability,” company CFO Paul Jacobson said.

GM CEO Mary Barra also wrote in a letter to shareholders on Tuesday that the company will moderate the acceleration of EV production in North America.

“We are also moderating the acceleration of EV production in North America to protect our pricing, adjust to slower near-term growth in demand, and implement engineering efficiency and other improvements that will make our vehicles less expensive to produce, and more profitable,” Barra said.

For the third quarter, GM’s operating income fell 11.1% year-over-year to $3.01 billion.

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