GM, Honda unveil plan to jointly develop ‘affordable’ EVs

General Motors Co. and Honda Motor Co. will jointly develop affordable electric vehicles for the most popular segments in large global markets, starting with North America in 2027.

The two automakers will develop a new architecture based on GM’s Ultium EV battery that will be used primarily for small crossover SUVs, they said Tuesday in a statement. The companies intend to build capacity to produce millions of vehicles.

“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,” GM Chief Executive Officer Mary Barra said in the statement. The partnership will produce EVs in large scale “faster than either company could achieve on its own.”

The announcement significantly expands a collaboration between the automakers, deepening ties as they aim to share development costs and find sales growth. GM and Honda had already been working together on hydrogen fuel cells since 2013, and more recently announced collaborations on EV batteries, gas-powered vehicles and self-driving technology.

GM’s shares rose 1.4% at 7:50 a.m. before regular trading in New York.

Last year, Honda became the first Japanese automaker to state publicly it will stop selling gasoline-powered vehicles, setting a target to phase them out completely by 2040. Meanwhile, GM plans to build and sell 30 electric vehicles by 2025 and eliminate gasoline and diesel-powered vehicles a decade later.

“Honda is committed to reaching our goal of carbon neutrality on a global basis by 2050, which requires driving down the cost of electric vehicles to make EV ownership possible for the greatest number of customers,” said Honda CEO Toshihiro Mibe in Tuesday’s statement.

GM and Honda have been jointly developing engines and crossover SUVs in a bid to cut costs and redirect spending toward building EVs. The companies said in 2020 they plan to cooperate in areas such as parts and materials purchasing, research activities and connected-car services as well.

The 2020 link with GM was a big step for the Japanese automaker, which had long eschewed big strategic alliances. Building on the momentum, Honda last month also announced plans to join forces with tech giant Sony Group Corp. to develop battery-powered cars.

–With assistance from Kevin Miller.