Japan's Honda raises electrification investment to $65 billion through FY2030

TOKYO (Reuters) -Japan's Honda Motor pledged to double its electrification and software investment to about $65 billion over the 10 years running through the 2030 business year, it said on Thursday.

Honda CEO Toshihiro Mibe told a press conference the automaker planned to spend a total of 10 trillion yen ($64.88 billion) on electrification and software over the period, doubling the amount it had pledged in April 2022.

The company, a relative latecomer to electric vehicles, first had to ensure it could reliably procure batteries and achieve cost cuts and performance improvements before focusing on software-defined vehicles, Mibe said.

"As for strengthening software development, we realised the amount we had settled on two years ago was simply not enough, so we significantly increased that portion," Mibe said, after a presentation that focused mostly on hardware improvements.

Models of a battery-powered vehicle series Honda will start rolling out from 2026 will have a cruising range of 300 miles (482 km) or more, Mibe said, pledging to equip the cars with an ultra-thin battery pack and a newly-developed compact e-axle.

The automaker said it aimed to cut battery procurement costs in North America by more than 20% by 2030 and reduce production expenses by about 35%, partly by boosting parts integration.

Japan's second-biggest automaker after Toyota Motor originally unveiled the battery-powered "Honda 0 Series" in January as it braces for a long-term push to catch up with global rivals in the transition to EVs.

Honda faces growing competition from established global brands that have rolled out EVs at a swifter pace and players such as Tesla and a raft of Chinese automakers, including BYD.

The automaker is scaling down its full-time production workforce in China due to heavy competition, with roughly 1,700 workers having agreed to leave as of this week, as its car sales decline in the world's biggest auto market.

Mibe said Honda plans to launch seven models in its EV series globally by 2030, but pointed out that the spread of EVs in North America and Europe was slowing, after reaching a plateau.

Honda unveiled plans last month to invest $11 billion in new EV and battery production plants alongside existing facilities in Ontario, Canada, as it prepares to expand in the North American market.

($1=154.1400 yen)

(Reporting by Daniel Leussink; Editing by Kim Coghill and Clarence Fernandez)