GM, Honda scrap plans to co-develop ‘affordable’ sub-$30,000 EVs

Detroit – General Motors and honda cars The two companies scrapped plans to jointly develop affordable electric vehicles as they faced lower-than-expected demand and changing market conditions.

About a year and a half after the partnership was announced, it’s the latest in a series of decisions by automakers, particularly General Motors, to scale back or cancel previously announced electric vehicle programs.

The partnership is expected to use GM’s next-generation Ultium battery technology to produce millions of electric vehicles priced under $30,000 for global markets starting in 2027. These will include the popular compact crossover.

Since the automakers first announced the partnership, the outlook for electric vehicles has dimmed due to rising costs, a lack of infrastructure and lower-than-expected consumer demand.

“After extensive research and analysis, we have mutually decided to terminate the program,” GM spokesman Darryll Harrison said in an email. “Each company remains committed to affordability in the electric vehicle market.” “Every company remains committed to affordability in the electric vehicle market.”

Harrison said the cancellation “has nothing to do with our plans to launch the next generation Bolt”. However, GM Chief Executive Mary Barra mentioned the Bolt as a better choice during an earnings call with investors on Tuesday when discussing the cancellation of a $5 billion capital commitment for entry-level electric vehicles.

“Our previous portfolio plans included several newly redesigned entry-level models and $5 billion in capital commitments over the next few years,” she said. “However, by leveraging the best attributes of today’s Bolt EUV and Ultium… we will deliver an even better driving, charging and ownership experience with vehicles we know our customers will love.”

Current Chevrolet Bolt models start at less than $30,000 without any EV incentives.

Harrison said other partnerships between the two companies are ongoing, including a deal for General Motors to produce the 2024 Honda Prologue electric vehicle. The two companies also have partnerships in hydrogen fuel cells and autonomous vehicles.

The companies came after General Motors scaled back some near-term electric vehicle goals, announced delays in production of at least three upcoming electric vehicles and revealed more details about delays in building a second all-electric truck plant in Michigan. Confirmed, they are ending their efforts at affordable electric cars. Until the end of 2025.

“We’re really focused on making sure we meet our demand targets,” GM Chief Financial Officer Paul Jacobson said during the automaker’s third-quarter earnings media briefing. “We’re balancing production with demand.”

Honda CEO Toshihiro Mibe tell Bloomberg TV On Tuesday, the company determined that the affordable electric vehicle project “will be difficult as a business.”

Honda did not immediately respond to a request for comment on the cancellation.