Honda and Hitachi form EV alliance

February 08, 2017

Honda and Hitachi Automotive Systems have announced a partnership to develop, produce and sell motors for electric vehicles (EV), as Honda aims to boost its EV development and contain its R&D costs. 

The agreement is set to be definitively penned in March and the new company established in July, with a ¥5 billion (€42 million) investment. The company will be 51% owned by Hitachi Automotive Systems, 49% held by Honda, and based in Hitachinaka City, in Ibaraki, Japan. 

The new joint venture will build motors for use in petrol hybrids, plug-in hybrids and pure electric cars, with sales and manufacturing functions in both the Unites States and China, in addition to Japan. Honda chief executive officer Takahiro Hachigo said: ‘Producing motors is capital intensive, so rather than just manufacturing them for our own purposes, we would like to produce in large volumes with the possibility of supplying a variety of customers.’ 

The third largest carmaker in Japan, this joint venture forms part of Honda’s strategy for low-energy cars to make up two-thirds of its vehicle line-up by 2030 – up from 5% currently. Following the discontinuation of its Fit mini MPV model in 2014, Honda does not currently manufacture a pure electric vehicle, but plans to launch pure electric and petrol plug-in hybrid versions of its Clarity hydrogen fuel cell vehicle later this year. 

The venture shows Honda’s openness to partnerships to enable it to expand its low-emission car line-up. It follows its collaboration announced last week with GM to produce hydrogen fuel cell systems in the US for use in both of their upcoming hydrogen cars.  

Hitachi Automotive Systems is a long-time supplier of components such as engines and brake parts to Honda, and also has large collaborations with other carmakers. The Renault-Nissan alliance is its biggest partner, accounting for one third of sales annually, and it also works with Toyota, Ford and Volkswagen Group. 

With lots of new technologies being developed for automotive use over the coming years, from connected technologies to autonomous and green powertrains, partnerships such as these and others allow carmakers to share the risk and burden associated with the high development costs.

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