Honda Continues To Walk The Walk With Another Battery Supply Deal

The race to develop battery supply chains is very real for auto manufacturers. Supplies are limited, and will remain so for years because digging new mines and refineries with a lot of optimism doesn’t work. It takes years to establish a new mine, therefore companies must plan several years ahead.

However, as I previously mentioned, Japanese auto manufacturers are in a bind when they’re almost entirely reliant on rare earth minerals and battery minerals from China. Given this backdrop, it’s not surprising that the Japanese government has realized they need to get ahead of the curve by developing their own clean energy technology and being more competitive elsewhere if they want to keep up with China. According to Quartz, China’s stranglehold on key minerals that drive not just clean technologies but also a variety of other important things including medical imaging came to a head for Japan in 2010 after a territorial dispute.

Could China’s victory against Japan in the past be influencing Japanese carmakers’ technology decisions today? After all, supply-chain disruption was a big part of how China won, and now that country is pouring resources into hydrogen fuel cells while most other nations are backing battery electric vehicles.

Honda has been on a similar road until quite recently. I’ve called them boneheads at least once for not taking electric vehicles seriously, much like Toyota. But Honda has made some moves more recently that show that the company could be changing its mind.

In April 2021, worldwide Honda CEO Toshihiro Mibe spoke about the company’s plans for electrified vehicle sales as part of its goal to have carbon-neutral goods and operations by 2050. The aim is for 100% of North American purchases to be battery-electric and fuel cell electric vehicles by 2040. Readers may learn more about that news by going here.

Last July, the company gave us a sneak peek of its design studio working on the Prologue EV. Not only was it doing innovative things to design its EV, but it seemed like it was building its own version of the upcoming budget-friendly Chevrolet Equinox EV. We received notice of the Acura Precision EV concept a month later. It was clearly intended by the Acura Design Studio in Los Angeles to push the boundaries of Acura design and technology, displaying Acura’s future vision for electrified vehicles with unique manual and full driving automation experiences. This concept became the ZDX.

As I pointed out at that time, it might not seem like partnering with GM was the best move to make, as GM is pretty far behind Tesla and some other players, but it is gearing up to dominate a very important slice of the automotive market, the $30,000-$35,000 segment. This gives GM a real shot of catching up, or at least getting a lot closer, in the next few years. Honda can take the first part of that ride with GM and then jump off toward its own higher-end projects as it gets its own platforms sorted out and ready to produce.

So, it makes sense to be cautiously optimistic about Honda right now, but we also need to keep an eye on the company to see how serious it is about BEVs.

Honda Just Made A Deal That Tips The Scales Toward “They’re Serious” A Bit

Earlier this month, the company announced a deal with Hanwa Co., Ltd. (Hanwa), a major Japan-based trading company, that will help procure essential metals for batteries necessary for its electrified vehicles.

Honda made the following statement about its carbon neutrality objective: “We committed to achieving carbon neutrality for all of our products and corporate activities by 2050, as we’ve done since last year. To do so, Honda is pushing to make battery-electric cars (EVs) and fuel cell electric vehicles (FCVs). By 2040, Honda aims to release 30 EV models around the world with production volume of more than 2 million units each year in order to achieve this goal.”

Honda says that it established a strategic collaboration with Hanwa, a major trading firm with expertise in the area of resource procurement, to ensure that its electrification strategy is continuously implemented. Honda will maintain steady metal acquisition in the medium to long term, ensuring critical metals such as nickel, cobalt, and lithium are available for batteries at the core.

Honda also said in its press release that it will continue to collaborate with a variety of suppliers to guarantee efficient supply of vital resources, allowing the company to more fully execute its electrification plan and eventually achieve carbon neutrality.

This Doesn’t Prove Much Alone, But Good Things Are Adding Up

Talk is cheap, and there has been a lot of cheap talk over the years in the automotive industry regarding EVs. Like the iPhone a few years ago, there’s always a “Tesla killer” waiting in the wings, and big auto is always just around the corner from giving those whipper snappers and their edgy techno-king their comeuppance. But, over and over again, it hasn’t materialized for one reason or another.

Honda first talked the talk in 2021, and then started walking the walk some this year. It has partnering with GM to not have to start at square one, and is saying that it has plans to eventually move on from that arrangement or grow its own development on top of it. But, it’s important to keep in mind that building an Ultium-based vehicle with GM means using GM’s battery supply chains, and that means Honda won’t have anything of its own for serious growth later.

So, this latest battery supply deal might not seem like much on its own, but it’s some fairly solid “show me the money” proof that Honda is serious about getting its own battery supply chain going for its own Honda-platform electric vehicle that it has promised to move toward to. This isn’t proof that Honda is going to finish up its plan, but unlike talk, making deals like this isn’t cheap. So, it’s a little more walk being walked.

So, there’s reason to be a little more optimistic about Honda’s future with BEVs. I think that’s a good thing, as Honda tends to make high quality products that buyers love and that tend to last when cared for even in a half-assed way by the owner. For Honda to make a serious EV effort means there could be some real good quality EVs coming in the next few years. We can always use more of that.

Featured image: Honda’s Acura Precision EV concept. Image provided by Honda.

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