Honda is building its all-electric empire by investing $40 billion in EVs

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Japanese automobile maker Honda is joining the global automakers that are investing billions of dollars to manufacture electric vehicles.

Honda announced that it would invest approximately $40 billion (five trillion Japanese yen) to electrify its lineup with 30 battery-electric vehicles, including two SUVs and a mini car, around the world and to produce two million electric vehicles annually by 2030. “As far as resource investments over the next 10 years go, we’re going to invest about [$64 billion (eight trillion yen) in research and development expenses,” said Honda Chief Executive Toshihiro Mibe.

Last April, during the company’s inaugural press conference, Mibe said “In order to achieve our carbon-free goal on a “tank-to-wheel” basis, as the responsibility of an automaker, Honda will strive to increase the ratio of battery-electric vehicles and fuel cell electric vehicles within overall unit sales in all major markets of electrification combined to 40 percent by 2030, to 80 percent by 2035, and then to 100 percent globally by 2040. These are challenging targets, and to attain them, we must put forth a collective effort of our entire value chain.”

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Investments include developing solid-state batteries

Honda is also focusing on the development of solid-state batteries, which are lighter and faster to recharge and offer more traveling range than traditionally used lithium-ion batteries.

The company has invested $343 million (43 billion yen) into developing its own line of solid-state batteries so far. Honda aims to bring its product into the market in the second half of this decade. But in the meantime, the company still relies on lithium batteries, which it gets from external partners, such as General Motors in North America. On the other hand, Honda hasn’t ruled out forming a joint venture with an external partner.

Despite this effort and additional funds allocated toward solid-state battery development, a large part of Honda’s electrification strategy includes hybrid vehicles.