Honda Motor Co. Ltd (NYSE:HMC) is planning to significantly increase its investments in electrification and software development.
The automaker aims to spend around $65 billion over the next decade, effectively doubling the amount it had committed just two years ago, CEO Toshihiro Mibe revealed.
Mibe emphasized the necessity of this increased investment to ensure Honda can secure a reliable supply of batteries and achieve essential cost reductions and performance improvements before shifting focus to software-defined vehicles, reported Reuters.
"As for strengthening software development, we realized the amount we had settled on two years ago was simply not enough, so we significantly increased that portion," Mibe stated,
In 2026, Honda will introduce a new series of battery-powered vehicles featuring a cruising range of over 300 miles.
These vehicles will be equipped with ultra-thin battery packs and a newly developed compact e-axle, aiming to enhance performance and efficiency.
The company also targets a 20% reduction in battery procurement costs in North America by 2030, coupled with a 35% decrease in production expenses through increased parts integration.
Honda, Japan's second-largest automaker following Toyota Motor Corp. (NYSE:TM), initially revealed the "Honda 0 Series" in January, marking its commitment to catching up with global EV competitors.
Facing stiff competition from established brands and newer players like Tesla Inc. (NASDAQ:TSLA) and BYD Company (OTC:BYDDF), Honda is scaling back its full-time workforce in China.
Approximately 1,700 workers have agreed to leave amid declining sales in the world's largest auto market.
Honda plans to launch seven EV models globally by 2030 despite the competitive landscape.
However, Mibe noted that the expansion of EVs in North America and Europe appears to be slowing after reaching a plateau.
In response, Honda has unveiled plans to invest $11 billion in new EV and battery production facilities in Ontario, Canada, to bolster its presence in the North American market.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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