Honda To Invest $40 Billion In Next Decade To Ramp Up EV Production

Honda Motor is investing 5 trillion yen ($40 billion) to develop its electric vehicle technology over the next decade as the Japanese automaker accelerates its push toward net zero carbon emissions.

“We aim to realize carbon neutrality for all products and activities Honda is involved in by 2050, striving to eliminate carbon emissions from power sources of a wide variety of products” Tokyo-based Honda said in a statement on Tuesday. “To this end, Honda believes that a multi-faceted and multi-dimensional approach is needed, not a mere replacing of engines with batteries.”

Honda’s budget to develop EV technology is part of the group’s wider 8 trillion yen budget for research and development as the company streamlines existing businesses to reduce overall automobile production cost by 10% from 2018 levels, while gearing up for new growth areas such as EVs.

The company aims to produce more than 2 million environment-friendly cars annually from 2030 with the launch of 30 EV models by then. Honda claims to be the world’s largest manufacturer of power units, with yearly sales of 30 million units of mobility products used in motorcycles, automobiles, outboard motors and aircrafts.

Honda’s transition to environment-friendly vehicles will partly be funded by the $2.75 billion green bonds the company issued last month. “By allocating the proceeds from these green bonds to the development and production of zero-emission vehicles, Honda will further accelerate our initiatives toward the realization of a society that aims for zero environmental impact,” the company said.

Global auto giants have been ramping up production of EVs and hybrid cars amid growing demand for less polluting vehicles amid growing climate change concerns. Toyota Motors, the world’s biggest carmaker, aims to sell 3.5 million EVs a year by 2030. Last week, Honda and General Motors announced plans to develop an affordable EV that the partners aim to launch by 2027, expanding their existing collaboration for the development of mid-sized to large EVs for the North American market.