Honda Cancels Plans with GM for Affordable Electric SUVs

the honda logo is seen at the 2008 north
Honda Cancels Plans with GM for Affordable EV SUVsGetty Images
  • Honda and General Motors will no longer co-develop a series of affordable compact SUVs, as reported to Bloomberg.

  • Honda cited the current business environment, rising costs for the project, and challenges with getting adequate driving range.

  • While this joint plan has been cancelled, Honda says the two companies will "search for a solution separately."

Promises are easy to make but even easier to break. In April of last year, Honda and General Motors announced they were co-developing a series of affordable compact crossover SUVs that would feature next-generation batteries and arrive in 2027. But now, a year and a half later, Honda says it has cancelled the planned collaboration with GM, according to a Bloomberg report.

The decision is the result of the changing economic climate, with Honda CEO Toshihiro Mibe telling Bloomberg Television that "after studying this for a year, we decided that this would be difficult as a business." Honda said that the cost of the program and difficulty eking out enough highway range contributed to the cancellation. GM revealed earlier this week that it is unsure if the company can reach its original $14 billion forecast for profits in 2023, pointing at the United Auto Workers strike as the culprit.

The original plan had called for a new platform based on GM's Ultium battery, found in everything from the Chevy Equinox EV to the GMC Hummer EV and electric BrightDrop vans. The new vehicles would have been priced below the planned $30,000 base-spec Equinox EV, and the companies said they were exploring solid-state batteries and using materials such as lithium-metal and silicon.

There is still hope that we may see some sub-$30K electric cars from Honda and GM in the near future. While the joint plans are scrapped, Mibe said, "GM and Honda will search for a solution separately." But with both companies working on their own, it may take until after 2027 for these vehicles materialize.

The divorce should not affect the launch of the Honda Prologue and Acura ZDX, which are closely related to the Chevy Blazer EV and Cadillac Lyriq and utilize GM's Ultium battery tech. We anticipate deliveries of the Prologue and ZDX to still begin in early 2024.

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