The EV you can afford?
Who will build the first electric vehicle under $30,000 and possibly topple Tesla?
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American drivers are worried. Right now they fret about inflation and high gas prices. In the move toward electric vehicles (EVs), polls show US drivers are concerned about the lack of charging infrastructure and what they consider the high cost of an EV.
Elon Musk promised a Tesla under $35,000. That remains a dream. Two other companies have thrown the gauntlet down. They are promising an EV for less than $30,000 and plan to dethrone Tesla as the leader in EV production.
The GM CEO is asked about the collaboration with Honda to make what they call an attainable EV. (Credit: AXIOS)
TESLA IN THEIR SIGHTS
The sub-$30-G EV collaboration is between Honda and General Motors. The two behemoths have been working together on smaller projects (hydrogen fuel cells and autonomy). This is a leap into a deeper relationship that is aimed at driving down the price of producing a vehicle to make EVs “attainable.” The Honda CEO says the goal is to make an EV that costs the same as a gasoline powered car.
GM CEO Mary Barra says, “by working together, we’ll put people all over the world into EVs faster than either company could achieve on its own.” That would help Barra achieve her stated goal for GM to pass Tesla and become the number one EV maker. What does she think of Musk and Tesla? She told ABC News, “we respect all of our competitors, but it doesn’t consume a lot of my day.”
GM CEO Mary Barra asked about the number one EV maker Tesla and its leader Elon Musk. (Credit: ABC News)
Honda echoes talk of strength in numbers and working together. CEO Toshihiro Mibe said the companies, “will build on our successful technology collaboration to help achieve a dramatic expansion in the sales of electric vehicles.”
These vehicles, including the fastest-growing segment of compact crossovers, will hit the market starting in 2027. GM says the vehicles will be based on its "Ultium" platform. That led me to wonder what Honda would bring to the collaboration. Honda is known for being a company of engine builders so I assumed electric motors.
GM advertisement for its Ultium battery platform. (Credit: GM)
A GM spokesperson told me I am thinking about this collaboration in the wrong way. Both companies will build their own vehicles but they will share processes and some elements/parts for the vehicles.
COST SAVINGS WITH SCALE
They will work together on design and development of what are being dubbed as AEVs, Affordable Electric Vehicles. Basically, two heads are better than one. The combined quality of engineering from the two firms, they say, will help unlock savings in production costs. At least that is the plan.
Honda-e (Credit: Honda)
I asked Honda for insight into its views of this expanded partnership. They declined to talk about the effort since it is just getting off the ground. However, Rick Schostek, an American Honda Motor Co. Executive VP, wrote a note in which he said the plan is to leverage, “the strengths of our two companies to drive down the cost of electric vehicles.”
There is another reason for Honda to join forces with its Detroit rival. Schostek says collaborating with GM will help Honda reach, “our global commitment to achieve carbon neutrality on a global basis by 2050.”
Honda's CEO and Senior Managing Executive talk about the GM collaboration. (Credit: Honda)
Just days after this collaboration was announced, Honda revealed its broader EV plans. During a new conference, Honda revealed that its collaboration will concentrate of what it calls medium sized cars.
HONDA'S BIGGER PICTURE
Like other large automakers, Honda is speeding up its move to electric cars. Honda’s CEO announced his company will offer 30 models of EVs by 2030 and plans to be producing more than two million EVs a year by then. Honda says it will stop building gasoline powered cars by 2040.
In addition to its collaboration with GM, Honda says it will build two EV sports cars. (Credit: Honda)
Honda is looking for even more hook-ups with other companies. The Japanese automaker would like to find a partner to build batteries in the US. It also says it will build a dedicated EV factory in America.
Tesla has a head start. If the GM-Honda partnership can actually bring a $30,000 EV to market within five years, they might be able to topple Musk’s mantle as the largest producer of EVs.
(Cover photo credit: GM)