Honda Challenges Tesla with $40 Billion EV Investment

Honda Challenges Tesla with $40 Billion EV Investment

A lot of persons are already getting used to the idea of electric cars. Some car manufacturing companies are already putting plans in place, but some are taking it a step further. An example of such a company is Japanese car giant, Honda.

Honda has made it known that it plans to have up to 40% of its fleet fully electric by the year 2030. Backing this up is a $40 billion investment which implies that 30 new electric vehicle models can be available by that date. This is of course very different from Tesla that offers just five retail models.

The $40 billion investment stands for more than 60% of the company’s total research and development budget of about $64 billion, spanning across the next 10 years.

More so, about $345 million has been budgeted for the first demonstration round of new solid state batteries by 2024. Honda had earlier released a statement that they would phase out all of the non-EV cars in the North America market by the year 2040.

Honda still retains the position of the manufacturer with the biggest investment geared towards EV. Although Ford has plans to improve EV production by the year 2023, it involves just seven new EV models made available for the European market by the year 2025. General Motors has also made known their plan in January which is just a $7 billion investment.

This investment by Honda is to cater to the increasing demand for EVs. They also hope to achieve a “zero environmental footprint”, although this will not amount to much if there is the absence of supporting infrastructure for the purpose of charging the EVs.

However, the U.S. is considering investing billions on new EV infrastructure along American highways to make things easier for her citizens.

Honda Anticipates That You Will Forget Tesla

Tesla is still a big dog when it comes to the world of EVs, however their cars are still too expensive for the general public. Taking the price hike this year into consideration, the Model 3 which is the most affordable car from the company goes for about $47,000.

According to Techcrunch Honda has it in their plans to make available an $8,000 vehicle for the Japanese market. They are also looking at collaboration with General Motors to bring to the market a new $30,000 electric vehicle.

Things have not been so rosy with Tesla this week. Their stocks dropped on April 11 just about the same time that Elon Musk, the founder of Tesla made it known that he would not be on Twitter’s board, meaning that he can buy up more stock of the social media giant.

But the drop in the company’s stock prices could also be as a result of international supply shortages and Covid lockdowns in China. So you see that the manufacturing of electric vehicles also consumes quite an amount of earth’s mineral resources, particularly Lithium and Cobalt.

The act of mining and shipping these materials to various factories across the globe also has significant environmental impact.

Although there is a demand and better acceptance of Electric vehicles overseas, U.S. seems to be taking their time before getting fully onboard.

The big question now is whether the hike in gas prices and better availability of the EVs will push them towards better accepting the EVs.

With all these investments that car manufacturing companies have put into EVs, you can be sure that they believe that there will be better acceptance.