The Honda-GM announcement? The two automakers announced that they plan on teaming up to develop affordable electric vehicles (EVs) that will utilize a “new global platform.” General Motors’ Executive Vice President, Ken Morris, said these new EVs are expected to be priced below $30,000.
Here’s what you should know about the upcoming collaboration.
GM Stock: GM Announces a $30,000 EV with Honda
These new EVs will use General Motors’ Ultium battery technology. The Ultium-equipped vehicles will reportedly have a range of 400 miles per charge and be able to charge for more than 100 miles in 10 minutes. However, interested buyers will need to remain patient; the new, affordable EVs aren’t expected to enter production until 2027. Additionally, the financial terms of the partnership were not disclosed.
Still, General Motors CEO Mary Barra touted the potential synergies between the companies. Barra explained:
“GM and Honda will share our best technology, design and manufacturing strategies to deliver affordable and desirable EVs on a global scale, including our key markets in North America, South America and China.”
These two companies have worked together to produce vehicles before. In 2018, Honda invested $2.75 billion into Cruise for a 5.7% stake. Cruise is a majority-owned subsidiary of GM that develops self-driving vehicles. In 2020, the two automakers also announced that General Motors would help Honda develop two 2024 model EVs. Those electric vehicles will also use GM’s Ultium technology but have “Honda-exclusive exterior and interior designs.”
What’s Next for GM and Honda?
These two automakers have similar goals for the next decade. CEO Mary Barra has stated that, by 2025, GM plans to “sell more EVs in the U.S. than anyone else.”
To do this, Barra explained that GM must have a wide catalogue of EVs. General Motors also plans “to be capable of producing and selling 2 million EVs globally by 2025.” By 2040, the legacy automaker aspires to achieve carbon neutrality as well.
Meanwhile, Honda plans to “phase out all of its gasoline-powered vehicles in North America by 2040” and reach carbon neutrality by 2050. Despite partnering with GM for 2024 models, Honda plans on developing its own EV platform, too.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.