General Motors Corporation (NYSE:GM) has set out to vigorously pursue electrification, and on Tuesday, the automaker took another step in that direction.
What Happened: GM and Japanese automaker Honda Motor Co Limited (NYSE:HMC) said they will codevelop a series of affordable electric vehicles (EVs) based on a "new global architecture" using the former's Ultium battery technology.
The companies expect to start mass production of the EVs, beginning in 2027. The lineups under consideration include compact crossover vehicles, with both companies leveraging their technology, design and sourcing strategies.
Compact crossover, according to the companies, is the largest segment, with annual volumes of over 13 million vehicles, globally.
"GM and Honda will share our best technology, design and manufacturing strategies to deliver affordable and desirable EVs on a global scale, including our key markets in North America, South America and China," said Mary Barra, GM chair and CEO.
The Honda collaboration is an important step in GM's quest to achieve carbon neutrality in its global products and operations by 2040 and eliminate tailpipe emissions from light-duty vehicles in the U.S. by 2025, the CEO added.
The partnership aims at introducing a new all-electric product for North America, positioned at a price point lower than the upcoming Chevrolet Equinox EV. The Chevy Equinox EV is estimated to have a starting price of $30,000 in the U.S.
GM has already set its sights on installing annual production capacity of 2 million units of EVs by 2025.
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GM-Honda Have Long Been Partners: GM and Honda have been working together for many years, with the focus shifting to EVs in recent years. In 2013, the companies began collaborating on the co-development of next-generation fuel-cell systems and hydrogen storage technologies. Later in 2018, Honda started working with GM on EV battery module development efforts. The two companies announced in 2020 they would co-develop two EVs, including the Honda Prologue due to be launched in 2024, and the first Acura EV SUV.
The two companies also have an ongoing relationship with Cruise and are working together on the development of the Cruise Origin, a fully autonomous vehicle designed for driverless ride-hail and delivery.
Battery Tech Collaboration In The Works: Additionally, the companies said Tuesday they are discussing future EV battery tech collaboration to lower the cost of electrification, improve performance and drive sustainability for future vehicles.
The U.S. automaker is currently working on accelerating new technologies such as lithium-metal, silicon and solid-state batteries. It is also working on production methods to improve and update battery cell manufacturing processes. Honda, for its part, is also working on all-solid-state battery tech.
In premarket trading, GM shares were rising 0.79% to $43.52 and Honda was slipping 1.02% to $28.18.
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