Honda Motor Co., Ltd. recently held a 2024 business briefing detailing its electrification initiatives and investment strategy. Honda remains committed to achieving 100% EV and FCEV global vehicle sales by 2040, focusing on creating a robust EV brand and business foundation.
Key Highlights:
- Electrification Goals: Honda aims for EVs and FCEVs to represent 100% of global vehicle sales by 2040.
- Procurement and Production: By 2030, Honda plans to reduce North American battery costs by over 20% and overall production costs by 35%.
- EV Lineup: Introduction of the Honda 0 Series with seven models by 2030.
- Investment Strategy: Honda will invest 10 trillion yen in electrification over the next decade.
- Financial Goals: Achieving a 5% return on sales (ROS) for the EV business by 2030.
Electrification Approach
Honda’s commitment to EVs as the most effective solution for small mobility products like motorcycles and automobiles remains unchanged. The company plans to achieve carbon neutrality by 2050 and sees the EV shift continuing steadily. By 2030, Honda aims for EVs and FCEVs to account for 40% of its global auto sales, with over 2 million units produced annually.
Procurement and Production Reform
Honda is establishing a vertically-integrated EV value chain, focusing on batteries. By 2030, the company will reduce battery costs in North America by more than 20% compared to current prices. Honda is also set to lower overall production costs by approximately 35%. The production of 2 million EVs per year is anticipated, with a secure supply of batteries already in view.
EV Lineup Strategy
Honda’s flagship EV series, the Honda 0 Series, will feature seven models globally by 2030, ranging from small to large sizes. Additionally, Honda will introduce a micro-mobility product in Japan by FY2026, powered by four Mobile Power Pack e: (MPP).
Investment Strategy
Honda plans to invest approximately 10 trillion yen in resources over the next decade. This includes:
- R&D: 2 trillion yen towards software-defined mobility.
- EV Value Chains: 2 trillion yen in establishing comprehensive EV value chains in key markets.
- Production and Development: 6 trillion yen for production, motorcycle electrification, new EV models, and other areas.
Financial Goals
Honda aims to achieve a return on sales (ROS) of 5% for its EV business by 2030. The company plans to generate substantial cash flow by strengthening its motorcycle and ICE/HEV businesses. Honda will use these funds to invest in EV and new business areas, ensuring stable and continuous dividend payments and share buybacks.
In summary, Honda’s 2024 business briefing highlights a robust strategy for electrification and investment, aiming for a leading position in the global EV market by 2040.
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