General Motors and Honda will work together, “codeveloping a series of affordable electric vehicles (EVs),” the two companies announced yesterday. The two believe they can sell millions of the vehicles.
Bringing EV Costs Down
Affordability has long been an issue with EVs. Many new technologies are introduced first at the most expensive end of the market. They make their way to the mainstream as economies of scale drive down the cost of production.
Most automakers plan to transition to EVs – GM hopes to sell a mostly-electric lineup by 2035, while others plan to be EV-only by the end of the decade. But most have mapped their EV strategies onto the typical new technology development lifecycle. They build expensive luxury editions first – think Tesla Model S.
They then design progressively less-expensive vehicles as they ramp up production – like Tesla’s Model Y and Model 3.
But even most “affordable” EVs today carry stickers in the mid-$40,000 range. Apart from the soon-to-be-discontinued Nissan Leaf, there is no mainstream EV under the $30,000 line.
Honda and GM plan to change that. The vehicles will ride on GM’s Ultium architecture – a skateboard-like combination of battery, motors, and suspension that all fits beneath the floor of a car. It can be scaled up or down to produce vehicles of many sizes.
Compact Crossovers Likely First
The GM/Honda announcement didn’t say what size vehicle the two companies will target. But it nearly promised that small crossovers would come first. “The compact crossover segment is the largest in the world, with annual volumes of more than 13 million vehicles,” the announcement notes.
Honda plans to launch its first EV – the Prologue SUV – as a 2024 model. GM already sells a slate of EVs, ranging from the little Chevy Bolt EV to the luxury Cadillac Lyriq and the ultra-capable GMC Hummer EV pickup.
But this effort will target less-expensive models.
GM executive vice president Ken Morris told reporters on a conference call that the effort should produce cars below the $30,000 price tag of the upcoming Chevrolet Equinox EV.
