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Honda halts $5 billion project with GM to develop smaller EVs

Honda's CEO Toshihiro Mibe explained the decision to Bloomberg: "After studying this for a year, we decided that this would be difficult as a business,

Honda and General Motors announced that they are abandoning their joint project to create affordable electric vehicles. The decision comes a year after agreeing to collaborate on a $5 billion project aimed at outselling Tesla. The announcement also highlights GM’s decision to delay the release of multiple EV models to concentrate on profitability. 

Honda’s CEO Toshihiro Mibe explained the decision to Bloomberg: “After studying this for a year, we decided that this would be difficult as a business, so at the moment, the project itself has been canceled.” 

With plans to launch the first models in North America in 2027, the automakers decided in April 2022 to develop a new architecture based on GM’s Ultium EV battery, primarily used for small crossover sport utility vehicles.

During an earnings conference call, GM CEO Mary Barra announced that the American automaker was refocusing its EV efforts from entry-level models, including a $5 billion commitment to GM’s Bolt EV over the next few years. 

However, GM issued a warning earlier this week, citing the United Auto Workers strike as the reason it’s now impossible to predict if the company will make the $14 billion in profit it had projected for this year. The carmaker said, “Costs are mounting on the order of $200 million a week due to work stoppage-related costs, on top of $800 million already.”

A spokesman for Honda said that the recent safety incident in California that resulted in suspending the robotaxi firm’s driverless testing permit in the U.S. state would not affect its separate partnership with GM and its Cruise unit.

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Jaelyn Campbell
Jaelyn Campbell
Jaelyn Campbell is a staff writer/reporter for CBT News. She is a recent honors cum laude graduate with a BFA in Mass Media from Valdosta State University. Jaelyn is an enthusiastic creator with more than four years of experience in corporate communications, editing, broadcasting, and writing. Her articles in The Spectator, her hometown newspaper, changed how people perceive virtual reality. She connects her readers to the facts while providing them a voice to understand the challenges of being an entrepreneur in the digital world.

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