Honda overhauls business operations to rapidly accelerate EV deployment

Honda is overhauling its business as it looks to spark growth and catch up in the rapidly expanding EV market. The automaker said Tuesday it would establish a new division and consolidate operations to accelerate EV deployment.

Honda aligning its business to jump-start EV rollout

Japanese automakers are quickly falling behind as the industry progresses to fully electric vehicles. Although some continue to deny EVs are the future (looking at you, Toyota), Honda is looking to join the revolution.

Starting in April, Honda will make key organizational and operational changes to further accelerate its electric mobility business while enhancing value for its shareholders.

In a statement Tuesday, Honda said it will consolidate the development of vehicles, motorcycles, and other power products into a new business segment called its “Electrification Business Development Operations.”

Working together as one on battery electric vehicle (BEV) product development rather than separately will help “strengthen and accelerate Honda’s electrification business.”

To further boost its strategy, Honda plans to reorganize its regional operations, consolidating them into three markets. The new structure will consist of three regional operations rather than six, including North America, China, and associate regions, which groups together Japan, Asia, and South America with the Europe, Africa, and Middle East markets.

Honda ended the statement by saying it’s looking to “transform itself through electrification” and strives to become “even more recognized as a company society wants to exist in the electrified era.”

The Japanese automaker unveiled its first electric SUV in October, the Honda Prologue, which will be codeveloped with GM. The Prologue is set to debut next year as the company works toward achieving carbon neutrality by 2050.

Honda-EV-business
2024 Honda Prologue (Source: Honda)

Electrek’s Take

It’s good to see Honda aligning its business to focus on electric products and accelerate EV deployment. It will help streamline development and production in the long run.

Top comment by EhCanadian

Liked by 9 people

...that's not what the linked statement says.

In the linked statement's diagram, the automobile and motorcycle operations remain separate. The only change is "Business Development Operations" has been renamed "Electrification Business Development Operations", but that is meaningless when one of the sub-boxes says "BEV/HEV/ICE".

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However, it still may be too little too late at this point. Many automakers are already achieving double-digit (or 100%) electric vehicle sales, with production capabilities expanding rapidly.

Meanwhile, Honda has yet to release its first EV in North America. The Prologue is slated for 2024 but will be based on GM’s technology. Honda has plans to sell EVs on its own e:Architecture platform, but again, we will have to wait until 2026.

Honda’s CEO, Toshihiro Mibe, who took over in 2021, is trying to right the ship and get the automaker back on track in the fast-moving EV era. Mibe previously served as president representative director of Honda’s research and development (Honda R&D Co. Ltd) and is more open to the idea of electric vehicles. For example, Honda has previously dismissed hydrogen combustion as a viable option for cars, unlike Toyota, which stands by its hybrid strategy.

Hopefully, the new business structure can help spark growth for Honda. For them to become a company society wants to exist in the EV era, we need to see some zero-emission products first.

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Author

Avatar for Peter Johnson Peter Johnson

Peter Johnson is covering the auto industry’s step-by-step transformation to electric vehicles. He is an experienced investor, financial writer, and EV enthusiast. His enthusiasm for electric vehicles, primarily Tesla, is a significant reason he pursued a career in investments. If he isn’t telling you about his latest 10K findings, you can find him enjoying the outdoors or exercising