Honda CEO promises to ‘fight back’ from behind in EV racing

Tokyo – Honda Representative Director and President Toshihiro Sanbe admits it is lagging behind in the global race for electric vehicles. Now he’s “fighting back” and outlining a radical strategy to reignite Honda’s mojo.

Honda’s drastic renovation It depends on new models, better batteries, powerful software, a completely revamped driver interface, a purpose-built EV factory and a completely overhauled production system developed by one of the world’s most innovative manufacturers. .

It is also related to securing new semiconductors, which will be the lifeline of future automobiles.

Mibe promised that the global reboot would be in full swing in just two years from 2025.

The CEO outlined the vision during Honda’s annual business briefing on Wednesday. Mibe said Honda executives shanghai motor show.

Local Chinese brands filled the exhibition halls with all kinds of sophisticated and advanced EVs.

“We were overwhelmed by the Chinese,” said COO Shinji Aoyama.

Mibe said China’s EVs have made great strides during the COVID-19 pandemic, when the world was largely cut off from the country by travel restrictions and quarantine measures.

“They’re ahead of us, more than we expected,” Mibe said.

“We’re figuring out how to fight back, otherwise we’re going to lose this race,” he said. “We recognize that we are slightly behind and are determined to turn the tables.”

The doubled-up ambition is part of Honda’s larger plan to phase out the internal combustion engine by 2040, selling only fully electric and hydrogen fuel cell vehicles by then.

In the process, we plan to secure production capacity to sell approximately 2 million EVs and fuel cells worldwide in 2030.

In the meantime, Honda will squeeze as much of its existing gas and hybrid cars as it can and use the money to develop EVs and other future technologies.

Mr. Sanbe said, “We are aiming for a business structure that can earn even in the EV era. Our goal is to achieve a 7% profit margin on sales in the short term, and we will exceed that in 2030 and beyond.

“We believe it is important to aggressively reinvest free cash flow from our internal combustion business, including hybrids, in areas related to competitiveness in future electrification.”

Turning point in 2025

Honda will fight back from 2025.

At that time, Honda will launch its own EV-only platform for medium to large EVs in North America. In China, Honda unveiled four new EV models at the Shanghai show, saying it would phase out petrol cars by 2027 and offer only EVs by 2035.

Additionally, starting with the 2026 model year, Honda’s upcoming EVs will also feature new vehicle operating software that Honda is developing in-house.

This software enables a new user interface for drivers and passengers.

In fact, Honda appointed its first “Global UX Officer” from April 1st to make the interior of Honda cars look like smartphones. The new hire is Hirokichi Koga, the CEO of his Silicon Valley-based software startup, Drivemode, which he acquired in 2019 as part of Honda’s foray into digital mobility.

The goal is to provide new software services and applications that can generate new revenue.

“The business model itself is completely different from today,” says Mr. Sanbe.

Historically, automakers have made their profits primarily on one-time sales of hardware. Volume was king. Honda will continue to sell service for the life of the vehicle. Volume alone does not guarantee success. In the long run you will have to provide additional services.

“We need to think about long-term value and develop it into a business,” Aoyama said.

To power all this software, Honda has also partnered with Taiwan Semiconductor Manufacturing (TSMC), the world’s largest microchip manufacturer.

This will help ensure a stable supply of chips in the medium to long term and help avoid shortages like those that have weighed on auto production across the industry in the past few years, Mibe said. Honda CEO promises to ‘fight back’ from behind in EV racing

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