GM, Honda to jointly develop 'millions' of affordable EVs by 2027

General Motors and Honda Motor Co. plan to co-develop a line of affordable electric vehicles, with a focus on compact crossovers, starting in 2027.

The automakers say the collaboration will enable global production of "millions" of EVs, including compact crossovers. The vehicles will be based on a new global electric architecture powered by GM's Ultium battery technology, GM and Honda said in a joint statement Tuesday.

GM and Honda will also aim to standardize equipment and processes for better quality, higher throughput and more affordable EVs for consumers. They also will discuss the potential to collaborate on EV battery technology to reduce the cost of electrification and improve performance.

Both automakers have already set ambitious EV targets. Honda aims to reach carbon neutrality on a global basis by 2050, and GM hopes to have an all-electric lineup by 2035.

"By working together, we’ll put people all over the world into EVs faster than either company could achieve on its own,” GM CEO Mary Barra said in the statement.

The co-developed EV lineup will focus mostly on the compact crossover segment, the automakers said, which they say accounts for 13 million sales annually.

The companies declined to provide a range of price points for the new line of EVs, but Ken Morris, GM’s executive vice president of electric, autonomous and fuel cell programs, said the vehicles would slot below the Chevrolet Equinox EV, both in size and price. GM has said the Equinox EV, due in 2023, would start at around $30,000.

Rick Schostek, executive vice president of corporate operations at American Honda, said the automaker will seek price parity with its internal-combustion vehicles, but noted that bringing EV prices down to ICE levels will take time.

The automakers plan to build the EVs at their existing plants. They are determining how to divide production between Honda and GM.

The plan is part of the automakers' North American auto alliance, which they announced in September 2020. The alliance built on an earlier partnership in which GM would help develop two new EVs for Honda powered by GM's Ultium batteries.

“We are really excited from the Honda viewpoint, compared to the earlier announcement back in 2020 where GM had a platform prepared and we were able to use that,” Schostek said. “Here, we’re able to work with GM to advance a new architecture. It’s going to be very flexible so that each of our companies can position the products that will develop from this in the right place in our lineups.”

GM shares fell 4.1 percent to close at $41.42 on Tuesday.