Honda CEO Toshihiro Mibe was unpleasantly surprised by the amount of new Chinese EVs showed in Shanghai. “They are ahead of us, even more than expected,” Mibe explained /Honda
While delivering Honda’s annual business briefing last week, Honda CEO Toshihiro Mibe made a few interesting comments regarding Chinese competitors, according to Automotive News. He said Honda executives had an unpleasant surprise at the Shanghai auto show, where local brands flooded the exhibition hall with advanced EVs of all kinds.
In Shanghai, the Japanese automaker displayed three electric SUVs due to launch in China in 2024. At the same time, Honda and GS Yuasa are planning a joint battery factory in Japan. Production is said to kick off in 2027. The cell factory is to be built and operated by a joint venture between the two companies that has existed for 14 years.
Last week, Honda Motor Company announced new steps to accelerate electrification, introducing new BEV models in key markets, including North America, China, and Japan in 2024.
Honda also plans to introduce better batteries, powerful software, and a totally transformed driver interface to catch up to EV industry leaders. In addition, the automaker plans to have dedicated EV factories with a completely overhauled production system and a secure supply of semiconductors.
That may take a few years to implement, but the steps appear necessary as CEO Toshihiro Mibe admitted Honda is falling behind in the global race for electric vehicles. The executive pledged the company’s global reboot will accelerate from 2025.
“They are ahead of us, even more than expected,” Mibe explained. “We are thinking of ways to fight back. If not, we will lose this competition. We recognized we are slightly lagging behind, and we are determined to turn the tables.”
Honda’s CEO said Chinese EVs had made big advances during the Covid-19 pandemic when the world was largely cut off from China by travel restrictions and quarantine measures. Mibe’s comments were echoed by Honda COO Shinji Aoyama, who said, “We were overwhelmed by the Chinese,” referring to the Shanghai auto show.
Such blunt statements admitting China’s dominance in the electric vehicle space are rare, at least from high-ranking executives of companies directly competing with the Chinese.
Shanghai auto show visitors could see for themselves how far ahead Chinese automakers are when it comes to electric vehicles. There were no fewer than 100 vehicle debuts at the show, of which 70 were all-electric. The vast majority of those 100 were from Chinese carmakers.
The domestic brands captured the majority of interest from media and influencers during the show’s press days, leaving the exhibition stands of global brands much emptier than those from Chinese rivals. For example, attendance at BYD’s new Yangwang premium brand stand was so high that the automaker had to create a queuing system to view the models.
New battery factory
The Japanese joint venture Blue Energy was founded by Honda and GS Yuasa in 2009, but the joint venture’s batteries have been used mainly in Honda hybrid models and the Toyota RAV4 Hybrid.
The current battery cell factory project is based on the agreement that Honda and GS Yuasa concluded in January this year. At that time, it was stated that the cooperation would focus on the development of the batteries themselves, as well as on production methods for batteries and on establishing a supply chain for critical raw materials.
Now, the construction of the factory is becoming concrete: Blue Energy will invest around 431 billion yen (± €2,9 billion) in battery development and construct a production facility in Japan with an annual capacity of 20 GWh. The factory will be commissioned in April 2027, with series production starting in October 2027.
Honda and GS Yuasa will receive 158,7 billion yen (about €1,06 billion) from the Japanese government in subsidies. In total, the Japanese government earmarked 184,6 billion yen (€1,26 billion) in subsidies for eight storage battery-related proposals and up to 56,4 billion yen (€383 million) for two semiconductor-related projects.
The announcement followed the Japanese government’s designation in December of semiconductors and batteries among critical materials as part of efforts to boost economic security in high-tech and other strategically important sectors. China has been a major supplier of EV batteries, with Contemporary Amperex Technology Co. and BYD leading manufacturers.
Honda also announced a series of measures to accelerate the expansion of its EV business, including a tie-up with Taiwan Semiconductor Manufacturing Co. to strengthen its chip procurement as it seeks to catch up with leading EV manufacturers. The Japanese carmaker also said it will launch four EV models in Japan by 2026, including a compact sport utility vehicle and two types of mini-vehicles modeled after the N-VAN and the N-ONE.
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