Honda doubling investment in electric vehicles to $65 billion

Honda announced plans Thursday to double investment in electric vehicles to $65 billion by 2030 as the Japanese auto giant seeks to go fully electric.

The company is aggressively pursuing a target set three years ago of achieving 100 percent EV sales by 2040.

In April, it announced the largest auto investment in Canada's history with a new US$11 billion EV battery and vehicle assembly plant.

The company also has a partnership in EVs with Sony, and is exploring collaboration with rival Nissan as they face a "once-in-a-century" upheaval in the car industry.

Analysts have said the move is aimed at catching up with Chinese EV competitors as Beijing-backed automakers such as BYD speed ahead of global rivals.

"Honda is planning to invest approximately 10 trillion yen in resources... through 2030, when the period of full-fledged popularisation of EVs is expected to start," a statement said.

The automaker had previously allocated five trillion yen to EV tech in the medium-term.

Honda wants to "establish a competitive business structure with an aim to reduce overall production cost by approximately 35 percent", it said Thursday.

And "as of 2030, Honda will reduce the cost of the battery to be procured in North America by more than 20 percent compared to the cost of current batteries".

By 2030 the company is aiming for electric vehicles and fuel-cell EVs to account for 40 percent of global sales.

The world's auto giants are increasingly prioritising electric and hybrid vehicles, with demand growing for less polluting models as concern about climate change grows.

At the same time, however, there has been a slowdown in the EV market on the back of consumer concern about high prices, reliability, range and a lack of charging points.

China overtook Japan as the world's biggest vehicle exporter in 2023, helped by its dominance in electric cars.

When Honda released its earnings last week, it said it expected overall vehicle sales in the United States and Japan to grow this financial year, but predicted sales in the rest of Asia would ease.

Honda plans to produce around two million EVs per year by 2030.

Its bigger rival Toyota aims to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030.

Toyota is also hoping to mass-produce solid-state batteries, a potentially hugely important technological breakthrough that could mean faster charging times and greater range.