Honda and Sony to build, sell EVs by 2025

TOKYO – Honda Motor Co., in the midst of a radical corporate makeover, will team with Japanese electronics giant Sony Corp. on a new joint venture to develop and sell electric vehicles.

Under the memorandum of understanding, announced March 4 by Honda and Sony, the companies will form a new company this year to create and commercialize “high value-added” battery electrics.

Honda and Sony want the new company, yet to be named, to start sales in 2025. A Honda spokeswoman said the new company would sell its vehicles in the U.S., Japan and Europe, but added that production sites are still under consideration. Honda declined a volume target.

Honda CEO Toshihiro Mibe said the initial enterprise is expected to be small.  But the Honda boss said that tying up with a tech company was crucial to innovating the business.

"This is maybe an unprecedented approach," Mibe said at press conference held with Sony CEO Kenichiro Yoshida. "It was so difficult to take a bold step outside. But through this new joint venture, we can create new, unexpected value, stimulating the strategy of Honda.

"It's like a chemical reaction, combining Honda and Sony," he said.

Sony CEO Kenichiro Yoshida said that new mobility technology will be the "megatrend" of the next decade, just as the advent of smartphones was over the past 10 years.

"Going forward, mobility will become increasingly similar to the mobile sector, from the perspective of both technology and the business model," Yoshida said.

The combination of the auto-tech heavyweights could be Japan's answer to maintaining the country's competitive edge against new digital-native entrants from Silicon Valley and China.

Honda will contribute its expertise in body manufacturing and after-sales service, while Sony brings knowhow in imaging, sensing, telecommunications, networking and entertainment technologies. The new venture will plan, design, develop and sell EVs — but at least for now, will not operate its own assembly plant.

Honda will be responsible for manufacturing the first EV model, the new partners said, and the vehicle will use a mobility service platform developed by Sony.

“Although Sony and Honda are companies that share many historical and cultural similarities, our areas of technological expertise are very different,” Mibe said in the joint statement.

“Therefore, I believe this alliance, which brings together the strengths of our two companies, offers great possibilities for the future of mobility,” he said.

The move comes as Honda takes steps to bolster its position in a rapidly changing automotive industry, with plans to drop combustion engines in favor of pure electric power by 2040.

Speaking in an interview with Automotive News late last year, Mibe said forming new partnerships, even with technology companies outside the auto sector, would be key to the transformation.

Meanwhile, Sony — maker of the PlayStation game console and guardian of a library of movies and music through its entertainment arm — has been eyeing its own entry into the auto field. In January at CES in Las Vegas Sony unveiled its second concept vehicle to underscore its intention.

“We intend to build on our vision to ‘make the mobility space an emotional one,’ and contribute to the evolution of mobility centered around safety, entertainment and adaptability,” Yoshida said, hinting at the company’s plan to leverage entertainment-on-the-go.

In January, Sony also created a company called Sony Mobility Inc. to handle its dive into cars.

Sony’s auto gambit will make use of its expertise in digital and software technology. Leaving the actual production of its car to an outside partner is a model being explored by other tech companies, such as Apple, to crack the auto sector.

In January, Honda boss Mibe, speaking as vice chairman of the Japan Automobile Manufacturers Association, welcomed Sony into Japan’s auto industry.

“You already see in Europe, the United States and China many new players coming into EV manufacturing. Sony is one of them,” Mibe said. “Having additional players in the industry brings about positive competition.

"A new entry like Sony will really revitalize the industry.”

As a mid-sized player on the global stage, Honda needs the help of friends.

For a long time, it has partnered with General Motors on a range of projects, from hydrogen fuel cell technology to electric vehicles. But Mibe is actively courting new partners.

Mibe plans to phase out Honda's internal combustion engines by 2040 in order to make Honda a carbon-neutral power and mobility provider. The company plans to introduce its own dedicated electric vehicle platform, called e:Architecture, as well as solid-state batteries in the second half of the 2020s. At the same time, it is developing autonomous vehicles, in part with GM’s Cruise, under a mobility-as-a-service enterprise.

In September, Honda said it will branch into electric vertical take-off and landing aircraft, known as eVTOL, with the aim to commercialize the craft by 2030. It then expects to develop small, reusable rockets that can put satellites into low-earth orbit.

Honda confirmed this month it has already conducted combustion tests of its prototype rocket.

Another new focus area will be avatar robots — machines with arms, hands and fingers that motion-capture real human movement to “make virtual mobility possible.”

“This is a necessary decision,” Mibe told Automotive News, “to make sure Honda exists sustainably into the future.”