The 2024 Honda Prologue is one in all two EVs being made by General Motors for the Japanese automaker, utilizing its Ultium battery technologies.
Honda
DETROIT – General Motors and Honda Motor have canceled plans to jointly develop inexpensive electric vehicles as they face slower-than-expected demand and changing market conditions.
The unwinding of the tie-up roughly a yr and a half after it was announced is the most recent in a string of selections by automakers, specifically GM, to reduce or cancel previously announced EV plans.
The partnership was expected to use GM’s next-generation Ultium battery technology to produce hundreds of thousands of EVs that cost lower than $30,000 for global markets starting in 2027. They were set to include popular compact crossover vehicles.
Because the automakers first announced the partnership, the outlook for EVs has dimmed due to higher costs, lack of infrastructure and slower-than-expected consumer demand.
“After extensive studies and evaluation, now we have come to a mutual decision to discontinue this system. Each company stays committed to affordability within the EV market,” GM spokesman Darryll Harrison said in an email. “Each company stays committed to affordability within the EV market.”
Harrison said the cancellation of this system “is just not connected with our plans to introduce a next generation Bolt.” Nonetheless, GM CEO Mary Barra referenced the Bolt as a greater option when discussing the cancellation of a $5 billion capital commitment for entry-level EVs during an earnings call Tuesday with investors.
“Our prior portfolio plans included several newly designed vehicles within the entry-level segments and a capital commitment of $5 billion over the following several years,” she said. “Nonetheless, by leveraging the very best attributes of today’s Bolt EUV in addition to Ultium … we’ll deliver a good higher driving, charging and ownership experience with a vehicle we all know customers love.”
Current Chevrolet Bolt models start under $30,000 with none EV incentives.
Harrison said other partnerships between the businesses, including a deal for GM to construct the 2024 Honda Prologue EV, proceed. The businesses even have partnerships around hydrogen fuel cells and autonomous vehicles.
The businesses confirmed they’d end the inexpensive EV effort after GM scaled back some near-term EV targets, announced delays in production of at the very least three upcoming EVs and disclosed additional details about postponing the build-out of a second all-electric truck plant in Michigan until late 2025.
“We’re really specializing in ensuring that we’re driving toward demand targets,” GM CFO Paul Jacobson said during a media briefing for the automaker’s third-quarter earnings. “We’re balancing production to demand.”
Honda CEO Toshihiro Mibe told Bloomberg Television on Tuesday that the corporate determined the inexpensive EV program “can be difficult as a business.”
Honda didn’t immediately respond for a request for comment on the cancellation of the plans.