A PAIR of major car brands have announced that they will abandon a plan to co-develop more affordable EVs.
The duo of motors giants have pulled the plug on the £5 billion project just a year after agreeing to work together to take on Tesla.
GM and Honda partnered up last year to try and beat the Elon Musk-helmed company in EV sales by providing high-quality, cheaper alternatives.
The joint platform was launched in April last year, with the first models expected to debut in 2027.
However, the plans have now fallen through as GM in particular slows its entry into the EV market.
Just this week the US-based manufacturer delayed production of a number of flagship electric models, including the Equinox, Silverado and GMC Sierra truck.
CEO Mary Barra announced the move during the company’s Q3 earnings call on Tuesday, saying that it will “make our vehicles less expensive to produce and more profitable” in the long run.
And GM also withdrew its 2023 profit outlook in the wake of the strike by the United Auto Workers (UAW) union, currently costing manufacturers a collective £165 million per week.
In a joint statement, the two companies said: “After extensive studies and analysis, we have come to a mutual decision to discontinue the program.
“Each company remains committed to affordability in the EV market.”
For its part, Honda said that the decision would not impact its commitment to go all-electric by 2040.
CEO Toshihiro Mibe told Bloomberg: “After studying this for a year, we decided that this would be difficult as a business, so at the moment we are ending development of an affordable EV.
“GM and Honda will search for a solution separately. This project itself has been cancelled.”
A spokesperson for GM said: “GM and Honda continue to work on co-developed electrified vehicles such as Acura ZDX and Honda Prologue, advancing state-of-the-art fuel cell technology, autonomous ride-hail vehicles – now expanding our efforts globally with the recent announcement in Japan and other areas that will transform mobility.
“GM’s focus over the next two years will continue to be on scaling the Ultium Platform and battery cell capacity, expanding a robust domestic EV supply chain, and delivering a comprehensive portfolio of EVs across categories, including lower cost models.”
A Honda spokesperson added: “Together, GM and Honda are working on a series of projects that are designed to transform mobility.
“These include co-developed electrified vehicles, advancing state-of-the-art fuel cell technology, and autonomous ride-hail vehicles.
“Last year, we began working on an affordable EV program for global markets, which was slated for introduction in 2027. After extensive studies and analysis, we have come to a mutual decision to discontinue the program.
“Each company remains committed to affordability in the EV market, with Honda focused on achieving 100% electrified vehicle sales by 2040, which includes the rollout of new EVs based on our dedicated EV platform, starting in 2025.”
It comes as a major change to EV laws affecting millions is set to come into action this week.
Meanwhile, Honda revived one of its most beloved cars as a hybrid – with some stark differences to the old model.