GM and Honda end their joint venture to develop low-cost electric vehicles

A "changing business environment" was quoted as the reason to discontinue the project

Back in April 2022, GM and Honda joined forces and announced plans to co-develop “a series of affordable electric vehicles” using GM’s Ultium EV battery pack.

The two were supposed to begin production of these EVs by 2027 and launch the first models in North America. However, Honda has now scrapped the plan, quoting a “changing business environment,” as shared by Bloomberg.

“After studying this for a year, we decided that this would be difficult as a business, so at the moment we are ending development of an affordable EV,” said Honda CEO Toshihiro Mibe Mibe in an interview with Bloomberg. “GM and Honda will search for a solution separately. This project itself has been cancelled.”

As shared by The Verge, GM has also confirmed that the project is being discontinued. “Last year, we began working on an affordable EV program for global markets, which was slated for introduction in 2027,” GM spokesperson Sanaz Marbley said in an email sent to The Verge. “After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market.”

GM also said this week that it is not certain if it could reach its target of $14 billion in profit this year, citing the ongoing strike by the United Auto Workers (UAW) union, which has made the automobile maker’s financial future difficult to predict.

The aim of the project was to produce EVs that would cost less than GM’s planned $30,000 USD (roughly $41,500 CAD) Chevrolet Equinox and Honda’s comparable models. By joining forces, GM and Honda hoped to lower battery costs and compete with EV market leaders like Tesla.

Source: Bloomberg, The Verge