Electric vehicles lead Honda to shift gear towards alliances
Honda Motor has long eschewed big strategic alliances, preferring to go it alone even as many of its car-making peers banded together to improve economies of scale. That strategy is changing now that the Japanese automaker is shifting more aggressively to electric vehicles (EVs).
“It will be extremely risky for Honda to push the move alone,” CEO Toshihiro Mibe said on Tuesday. “It’s meaningful to form alliances, mass produce and lower costs to make our business sustainable.”
Speaking at Honda’s Innovation Lab in central Tokyo, Mibe said Honda is open to working with others in different industries to developing software.
“Even if we make the electric cars, it’ll be extremely hard for Honda to develop software alone,” said Mibe, who helped lead R&D efforts at the company before becoming CEO in April. “Honda won’t hesitate to form alliances with companies that are strong in their field if that creates value promptly.”
In April, Honda became the first Japanese carmaker to state publicly it will stop selling petrol-powered vehicles, setting a target to phase them out completely by 2040. Given that EV penetration in Japan is just 1%, there’s strong growth potential for early movers, with global sales forecast to climb sharply in the coming years.
Toshihiro Mibe became CEO of Honda Motor in April after helping to lead R&D efforts at the company.
In 2018, Honda was in talks with Alphabet’s self-driving car unit, Waymo, to develop autonomous vehicles, but those discussions collapsed over issues related to technology access and balancing the relationship. It invested in and partnered with General Motors’ Cruise instead.
Aside from collaborations with General Motors in areas such as battery technology, Honda has followed a staunchly independent path, particularly when compared with other Japanese carmakers. That’s shifting under Mibe, though he wouldn’t disclose any names of companies Honda may form new partnerships with.
“We still want to discuss with various companies in various fields,” he said adding that he “believes in creating new value by becoming partners with nonauto companies”.