GM and Honda Plan Alliance, but What Will Each Auto Giant Obtain from It?
Honda and General Motors are in talks over an alliance that could see them develop and sell vehicles together under their own brands, as well as cooperate in research and development, connected services and purchasing. At stake is nothing short of sharing vehicle platforms, EV and internal combustion drivetrains, and the creation of vehicles in multiple segments. The two auto giants have signed a non-binding memorandum of understanding, with plans to develop two new electric vehicles together for Honda using GM’s Ultium batteries and EV platform, also soon to be seen in Hummer and Cadillac vehicles.
“This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio,” said Mark Reuss, president of General Motors.
What would Honda achieve from this alliance?
The Japanese automaker is expected to get access to GM’s EV technology, allowing it to field two new electric vehicles using GM’s Ultium batteries and electric drivetrains. Honda has shied away from introducing EVs in the U.S. along with Toyota, while Nissan has been able to dominate the electric hatchback niche with its Leaf for close to a decade.
Access to GM’s electric drivetrain would kickstart Honda’s EV efforts in North America, where it has declined to offer its small Honda e hatch, likely for range and size reasons. Honda is planning yet another EV for Europe, but has stayed mum on plans for North America until today, just as Volkswagen has readied a large wave of EVs for both continents. The planned Honda EVs could even feature GM’s OnStar safety, security and connected services.
GM, for its part, will be able to share the costs of research and development with Honda for its own vehicles, with the two companies collaborating on infotainment systems, advanced driver assist systems, vehicle-to-everything communication, connectivity and electrical architecture.
Less clear at the moment are just what conventional vehicle platforms and internal combustion engines the two companies could share.
“Through this new alliance with GM, we can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings,” said Seiji Kuraishi, executive vice president of Honda Motor Co., Ltd. “Combining the strengths of each company, and by carefully determining what we will do on our own and what we will do in collaboration, we will strive to build a win-win relationship to create new value for our customers. In this way, Honda will continue making steady progress in solidifying our existing business by realizing strong products, strong manufacturing capability and a strong business structure.”
Vehicle planning discussions between the two auto giants are expected to start in the coming weeks, with engineering work expected to begin in 2021.
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