How the Japanese automaker can secretly win the electric car race.
While Honda has long been known for its hybrid and gas-powered vehicles, it was only about a month ago that it unveiled its first international EV. Surprisingly, the Honda Prologue is proving to be one of the best mainstream offerings on the market.
While many were initially skeptical of how Honda’s partnership with GM would affect the brand, it was GM’s technology that made the Prologue so appealing. Based on GM’s Ultium platform and similar in shape to the upcoming Chevy Blazer EV, the Prologue boasts 288 hp, up to 300 miles of range, and a maximum charging rate of 155 kW.
Add to that an attractive design, an intuitive interior, and a starting price of under $50,000, and it seems Honda has created one of the best EVs outside of Tesla. However, while GM’s Ultium platform has allowed Honda to make the Prologue so competitive, is this partnership really as good as it seems on paper?
Honda’s partnership with GM: the good, the bad, and the uncertain.
GM is one of the leaders in the electric vehicle industry. Despite the production problems it has faced in the past, GM plans to spend more than $35 billion on EV development by 2025. In addition, GM promises to have 30 electric models on the market by then, many of which have already been introduced.
Judging by what GM has shown so far, the electric vehicle lineup will be very diverse and will include everything from affordable hatchbacks to full-size pickup trucks. So in the future, Honda could theoretically take any of GM’s future offerings and create any type of EV.
It’s also unlikely that sales of these vehicles will suffer because of their GM counterparts. While GM emphasizes the technological and futuristic nature of its EVs, Honda has so far opted for less polarizing designs and typical internal combustion engine vehicle features such as a Start/Stop button. As such, Honda’s vehicles seem more accessible to those looking for a transitional product.
However, there aren’t many ways in which Honda can differentiate its products from GM’s. Much of the Prologue’s infotainment system and interior layout is nearly identical to its American counterpart.
Another snag with this partnership is that it’s essentially just a cover for the fact that Honda’s own electric vehicle development is still underwhelming. The e:Ny1, Honda’s most recent independent attempt at an EV, starts at a similar price of $45,000, but has a range of just 256 miles (on the overly generous WLTP cycle), a less powerful 201-horsepower engine, and is 20 inches shorter than the Prologue.
For the same money, the latter is simply more reasonable.
As for how much Honda will rely on GM in the future, much remains in question. While the two companies plan to co-produce vehicles until at least 2027, reports suggest that by 2025 Honda will start selling a self-built EV that will be based on a new EV architecture. How competitive this vehicle proves to be will determine how much Honda will rely on GM in the future.
Honda still has the edge in hybrids.
While it’s easy to criticize Honda for not yet having its own electric car offering, the company is still in a strong position. The truth is that internal combustion engine cars and hybrids continue to dramatically outpace EVs despite multi-billion dollar investments by many automakers.
Even Tesla’s most popular competitors have never been able to cross the 40k annual sales mark. By Honda’s standards, if a car that billions of dollars were spent on developing sold in such low numbers, it would be a complete disaster. Honda’s most popular cars, such as the Accord, Civic and CRV, typically sell around 250k units per year.
It’s also worth noting that the proportion of hybrids sold for each model continues to grow year on year. By 2023, approximately 50% of all Accord and CRVs sold will be hybrids. Honda plans to bring a hybrid Civic to the North American market next year, and it will likely follow the same trend.
With more automakers abandoning hybrid vehicles in favor of all-electric vehicles, it’s likely that Honda will only increase demand for its expanding hybrid lineup.
At least for now, it makes the most sense for Honda to continue investing in improving its hybrid and gasoline powertrains. Then, perhaps five years from now, when the demand for electric vehicles is large enough to replace the demand for internal combustion engine vehicles, Honda can finally dive headfirst into electric vehicle development.