Honda and GM have scrapped their $5 billion plan to co-develop cheaper electric vehicles (EVs).
The two companies announced the partnership in 2020, with the goal of developing a new generation of affordable EVs using GM’s Ultium battery technology.
The plan was to launch the first jointly developed EVs in 2027.
However, the two companies have now decided to go their separate ways.
Honda cited the rising cost of developing EVs and the need to focus on its own electrification strategy as reasons for the decision. GM has not publicly released a reason for the split.
The cancellation of the Honda-GM partnership is a setback for both companies. Honda was hoping to leverage GM’s expertise in EV development to accelerate its own electrification plans.
GM was hoping to gain access to Honda’s strong brand recognition and sales network in Japan and other markets.
It is unclear what impact the cancellation of the partnership will have on Honda and GM’s EV plans. Honda has said that it is still committed to electrifying its lineup, but it is unclear how the company will develop its own EV platform and battery technology.
GM has said that it is committed to launching its Ultium-based EVs in 2027, but it is unclear how the company will meet this goal without Honda’s help.
The cancellation of the Honda-GM partnership is also a setback for the EV industry as a whole. The two companies are two of the world’s largest automakers, and their partnership was seen as a sign of the growing interest in EVs.
The cancellation of the partnership could discourage other automakers from investing in EVs.