Honda Bets Big on EVs with $11 Billion Canadian Investment, but Can They Catch Up?

Chinese new energy car brands are raising the bar for intelligent vehicles, according to the International Electronics Business News. This trend is putting pressure on established joint venture brands, leading to declining sales and even withdrawals from the Chinese market.

Honda, a long-established Japanese automaker, is feeling the heat of China's booming domestic car market, particularly in the mid-size sedan and minivan segments. Despite the early success of the Accord and Odyssey, these models have faced significant price cuts due to intense competition from Chinese brands.

In a major move to capture the booming EV market, Honda announced a $11 billion investment on April 25th to establish a comprehensive EV hub in Canada aiming to build a complete "EV value chain," including everything from vehicle production to supporting services.

The new center will reportedly include facilities for assembling electric cars, manufacturing batteries, and supporting the production of both all-electric and fuel cell vehicles to compete in the global EV market.

In addition, the support and encouragement of the Canadian government for the electric vehicle industry also provide a good policy environment for Honda's investment this time. It is reported that the Canadian authorities have promised to provide financial assistance.

According to the plan, the production base is expected to be gradually completed and put into use in the next few years.

Canada's supportive EV policies, including potential financial aid, likely influenced Honda's investment decision. The production base will be built over the next few years.

However, Honda's broader strategy appears hesitant. Despite the challenges in China, a market with explosive EV growth and a sophisticated supply chain, Honda hasn't established a dedicated R&D center there. Instead, their new electric vehicle, the Prologue, utilizes a GM platform and targets the North American market, where EV penetration is significantly lower (around 13%) compared to China's (over 30%).

This focus on North America, with its higher electric vehicle price points and a potentially softening economy, raises concerns about Honda's long-term EV strategy.