Automotive OEMs Honda and General Motors are ending plans to develop jointly affordable electric vehicles (EVs), just a year after they agreed to work together on the $5 billion effort.
The move comes just a few days after both companies agreed to work together on delivering ride-hailing robotaxis to the Japanese market through GM’s subsidiary Cruise Automation.
The companies originally signed the agreement for EVs in April of 2022 with the goal to produce millions of cheap EVs starting in 2027. The companies would work toward standardizing equipment and processes to achieve higher throughput and greater affordability. There would be a specific focus on compact crossovers due to it being the largest vehicle segment in the world with volumes of more than 13 million vehicles.
According to a report from Reuters, GM is looking to focus more on EV models that are highly profitable and the affordable segment is not something they are looking to, given the United Auto Worker strike, continued inflation and problematic economic situations.
"After extensive studies and analysis, we have come to a mutual decision to discontinue the program,” the companies said in a joint statement. “Each company remains committed to affordability in the EV market."
Honda said it has not changed its plan to sell only EVs by 2040.
For its part, GM, which introduced its Ultium battery technology in early 2021, said it would phase out sales of gas- and diesel-powered engine vehicles in favor of new EV models by 2040.
