• Approach to electrification targets:

Honda has not modified its perception that EVs are the simplest answer within the space of small mobility merchandise comparable to bikes and vehicles, and Honda’s electrification goal to make EVs and FCEVs symbolize 100% of its world automobile gross sales by 2040 stays unchanged. Honda should stay up for the interval of EV popularization and construct a powerful EV model and a powerful EV enterprise basis from a medium- to long-term perspective. 

• Structural reform of procurement and manufacturing operations:

Through the institution of a vertically-integrated EV worth chain with a central give attention to batteries, as of 2030, Honda will scale back the price of the battery to be procured in North America by greater than 20% in comparison with the price of present batteries.

Honda will set up a aggressive enterprise construction with an intention to cut back general manufacturing price by roughly 35%. Honda already has a constructive outlook to safe sufficient batteries for the deliberate manufacturing of roughly 2 million EVs per 12 months. 

• EV lineup technique:

For the Honda 0 Series, a world EV sequence which would be the flagship sequence of Honda EVs, a complete of seven fashions can be launched globally by 2030 together with varied fashions starting from small to massive dimension. As part of electrification with using Honda Mobile Power Pack e: (MPP), Honda will introduce a micro-mobility product which can be outfitted with 4 MPPs in Japan earlier than the tip of FY2026, enhancing the functions of MPPs.

• Financial technique:

Honda is planning to take a position roughly 10 trillion yen in sources over the 10-year interval by way of FY2031, when the interval of full-fledged popularization of EVs is anticipated to start out. Honda will pursue each daring investments for future progress and shareholder returns.

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TOKYO, Japan, May 16, 2024 — Honda Motor Co., Ltd. Director, President and Representative Executive Officer (Global CEO) Toshihiro Mibe at the moment held a press briefing on Honda initiatives centering on car electrification.

Following is a abstract of his formal remarks: 

1.    Honda strategy to electrification and initiatives towards reaching its targets:

The surroundings surrounding car electrification is present process dramatic modifications, and in some areas, the sense of a slowdown in EV market progress is gaining consideration. There are varied approaches towards Honda’s 2050 objective of carbon neutrality. For instance, to realize “zero environmental impact” in powering massive mobility merchandise comparable to plane and huge watercraft, using SAF^*1  and e-fuel is being considered as a excessive potential answer, from the angle of vary.

On the opposite hand, Honda has not modified its perception that EVs are the simplest answer within the space of small mobility merchandise comparable to bikes and vehicles. Looking on the pattern from a longer-term perspective, Honda is assured that the EV shift will proceed to proceed steadily. Without getting too caught up within the present modifications within the state of affairs, Honda should stay up for the interval of EV popularization, which can start within the second half of the 2020s and construct a powerful EV model and a powerful EV enterprise from a medium- to long-term perspective.

As of 2030, Honda plans to make EVs and FCEVs symbolize 40% of its world auto gross sales, and to provide greater than 2 million items of EVs. Working towards this future, Honda will steadily pursue the next three initiatives, whereas making funding choices on the proper timing:

1)    Introduction of engaging EVs solely Honda can provide
2)    Establishment of a complete EV worth chain with a central give attention to batteries
3)    Advancement of EV manufacturing applied sciences and services

Through these initiatives, Honda is aiming to realize a return on gross sales (ROS) of 5% for its EV enterprise as of 2030 to additional enhance its revenue margin to make its BEV enterprise self-sustaining. 

^{*1 SAF: sustainable aviation fuels}

1-1． Introduction of engaging EVs solely Honda can provide

The Honda 0 Series, which can play a key function within the Honda EV technique, can be a very CR-V EV sequence Honda will create from “zero” with a brand new EV growth strategy of “Thin, Light, and Wise.” In January of this 12 months, at CES, two idea fashions have been unveiled, particularly Saloon and Space-Hub. As for Saloon, which can grow to be a flagship mannequin of the sequence, Honda is planning for the market launch of a mannequin similar to this idea mannequin, in 2026. 

n  “Thin”

Honda will try to supply a price to our clients with “space” that excels in each driving efficiency and luxury, embodying Honda’s long-cherished M/M (Man Maximum, Machine Minimum) idea within the EV period.

• With the adoption of a brand new devoted framework for mid- to large-size EVs platform an additional superior energy unit, a bundle that includes unprecedented styling with a low automobile top and a brief overhang can be realized. 
• With the adoption of a newly-developed compact e-Axle and the world’s top-class ultra-thin battery pack, the motor room and flooring can be made skinny. Moreover, each the low automobile top styling and a spacious and comfy inside house can be achieved by way of the appliance of applied sciences Honda has amassed by way of our lengthy historical past of automotive making. This consists of optimization of the elements structure, discount of the variety of elements, in addition to adoption of Honda’s authentic collision management expertise, and the adoption of physique frames that mix wonderful design and efficiency.
• Furthermore, the cabin can be designed to understand extra consolation and extra enjoyable of driving, that includes an intuitive person interface and exhilarating visibility.

n  “Light”

For its new EV sequence fashions, Honda will pursue sporty driving that results in the “joy of driving,” which has been a dedication in Honda’s automotive making. 

• In addition to lighter physique frames, the brand new EV sequence fashions will undertake an all-new energy unit, which was made lighter and thinner by making use of Honda’s authentic applied sciences amassed by way of the event of F1 machines and HEV fashions. This will allow Honda to scale back the general automobile weight by roughly 100kg (220 kilos) in comparison with preliminary Honda EVs. 
• Heavy elements such because the battery and energy unit can be positioned low and within the middle of the automobile physique to understand a low middle of gravity, leading to secure automobile habits and a nimble and sporty driving efficiency. 
• As a expertise to understand automobile management on the will of the motive force, an additional development was achieved for the movement administration system developed primarily based on posture management expertise that Honda has amassed by way of the event of its authentic robotics applied sciences.   
• By combining the extremely environment friendly energy unit and wonderful aerodynamic expertise Honda has amassed by way of motorsports actions, the brand new EV sequence fashions will obtain each a sporty driving expertise distinctive to Honda and the world’s prime class electrical energy effectivity efficiency. With that, Honda will try to understand ample vary of greater than 300 miles (480 km)^*2 for every of the Honda 0 Series fashions.

n  “Wise”

Equipped with an authentic automobile OS, Honda 0 Series fashions will provide a digital UX optimized for every particular person buyer, along with the development of linked applied sciences. Vehicle features can be constantly up to date with OTA (over-the-air) updates, which can additional advance our EVs as engaging merchandise solely Honda can provide.

• Honda will independently develop the underlying E&E structure, the automobile OS which is the higher layer of the general structure, in addition to varied functions that can be on the automobile OS. Honda will apply authentic customization to the SoC (system-on-chip) semiconductors which can be put in in Honda 0 Series fashions. For instance, such custom-made SoC will function AI, which is important for the development of automation and intelligence, but helps decrease energy consumption. 
• The EV fashions we’ll introduce within the second half of the 2020s will constantly advance in a method that they are going to possess intelligence to be extra attentive to the preferences and wishes of every particular person buyer.
• The Honda 0 Series fashions which can be launched within the second half of the 2020s will undertake a centralized structure, which can consolidate a number of ECUs that are serving particular person features to manage the automobile’s methods, to a core ECU and function a single “brain” for all the automobile. This will align every perform and make it doable to speedily provide new and provoking experiences by no means earlier than doable. With that, Honda EV fashions will constantly advance in a method that they are going to possess intelligence to be extra attentive to the preferences and wishes of every particular person buyer.
• As for AD/ADAS (automated driving and superior driver help methods), Honda is aiming to supply a seamless mobility expertise, not solely contained in the automobile however all the course of from the second the shopper enters the automobile till they exit the automobile. To this finish, the AD/ADAS can be superior to be extra in tune with human sensibilities by adopting additional superior sensing applied sciences and intelligence applied sciences together with AI. As for driver-assistive applied sciences, the Level 3 automated driving expertise, which Honda put into sensible use forward of different corporations all over the world, can be utilized to make automated driving features out there in a broader velocity vary on expressways, in addition to on common roads. Moreover, by offering clients with constant assist for his or her complete mobility expertise, together with pickup association and parking of the automobile at locations away from residence, Honda will understand “the joy and freedom of mobility” with much less stress to our clients.

^{*2 A spread measured primarily based on the requirements set by the EPA (the U.S. Environmental Protection Agency)}

1-2. 　Establishment of a complete EV worth chain with a central give attention to batteries

To safe excessive competitiveness from a long-term perspective, Honda will try to construct worth chains in levels with a central give attention to batteries, that are core elements of EVs and decide the competitiveness of EVs.

■    The early days of EVs: the primary half of the 2020s

Honda will stably procure obligatory quantity of batteries whereas holding down the associated fee by strengthening exterior partnerships for the liquid lithium-ion batteries in every respective area.

n  The transitional interval for EVs: within the mid-2020s

Honda will start battery manufacturing with its JV companions.

In the U.S., in 2025, the three way partnership EV battery plant with LG Energy Solution will start manufacturing with a capability of 40GWh of batteries per 12 months. By constructing a strong worth chain with its associate, which could have the biggest scale in North America, Honda will understand a aggressive battery price. Moreover, the light-weight and compact battery packs, which can be produced with Honda’s high-density packaging applied sciences, can be put in within the Honda 0 Series fashions and contribute to reinforce the product worth of these fashions.

In addition to EV manufacturing, Honda will develop the scope of its enterprise into the battery life cycle enterprise, which incorporates the areas of charging service, power service and reuse/recycle. Honda will construct a secure enterprise basis by increasing the areas of battery enterprise Honda will do in-house.

n  The popularization interval for EVs: within the second half of the 2020s

Honda will additional develop its scope of battery enterprise and try to construct a vertically-integrated and complete EV worth chain with a central give attention to batteries, that features all facets of EV manufacturing, from procurement of uncooked supplies primarily for batteries, by way of manufacturing of completed EVs, in addition to battery reuse and recycling. 

In Canada, Honda will start in-house manufacturing of the EV battery being co-developed with GS Yuasa. As for key battery supplies, in Canada, Honda will proceed to internalize manufacturing by producing cathode supplies with POSCO Future M, and separators with Asahi Kasei, at our respective new three way partnership crops to be constructed. 

Moreover, Honda is aiming to construct a complete worth chain with an eye fixed towards secondary use and the recycling of EV batteries. With that, along with optimizing battery costs and reaching a secure provide, Honda will make sure the competitiveness of its complete worth chain, together with the upstream and downstream areas of EV battery enterprise. 

With these initiatives, in 2030, Honda will scale back the price of the battery to be procured in North America by greater than 20% in comparison with the price of present batteries. As for batteries obligatory for the manufacturing of roughly 2 million items of EVs deliberate for 2030, we have already got a constructive outlook to safe sufficient batteries

1-3.   Advancement of EV manufacturing applied sciences and services

The interval of transition from ICE to EV main as much as the mid-2020s can be a part wherein Honda will reply flexibly to modifications in demand and the enterprise surroundings whereas additionally making certain profitability. During this part, our present manufacturing services can be absolutely utilized to provide each ICE and EV fashions on the identical line.

In addition, Honda will advance its manufacturing operations by steadily incorporating superior applied sciences obligatory to understand the “Thin, Light and Wise” idea. This will result in the institution of a extremely environment friendly manufacturing construction at devoted EV crops sooner or later. 

As for the manufacturing line of the skinny battery pack, which would be the key to EV manufacturing, the brand new battery case manufacturing line to be put in at our Anna Plant in Ohio can be outfitted with mega casting machines, that are 6,000-ton class high-pressure die-casting machines. This will tremendously scale back the whole variety of elements consisting of the battery case and secondary elements from over 60 to five elements. Also, mixed with the expertise of friction stir welding (FSW), funding can be decreased and manufacturing effectivity can be elevated on the similar time.

Honda turned the primary firm in Japan^*3 to put in a 6,000-ton class mega casting machine to its manufacturing expertise R&D facility positioned in Tochigi, Japan, at present being verified for mass manufacturing. 

Including utility to the manufacturing of huge solid aluminum physique body elements sooner or later, the die-casting expertise can be constantly superior.

As for the battery pack meeting line, Honda’s authentic “Flex Cell Production System,” can be adopted. This system combines 1) the modular elements configuration in response to the product perform of the automobile and a pair of) the “cell production system” that brings collectively in a single space the gear, jigs, and manufacturing associates required for every manufacturing course of. The adoption of the Flex Cell Production System forward of the beginning of full-capacity EV manufacturing will allow versatile responses to modifications in manufacturing fashions and fluctuations in manufacturing quantity. In addition, by using the Digital Twin, which reproduces real-life manufacturing line situations in our on-line world in actual time, the manufacturing effectivity in varied facets together with the availability of elements to factories, manufacturing quantity and velocity can be optimized. In this fashion, Honda will provide merchandise in a well timed method in accordance with market wants. In the longer term, Honda plans to additional develop the scope of functions of those applied sciences past the battery pack manufacturing line, and apply them to all traces at Honda EV manufacturing services. 

Ultimately, the fruits of those initiatives can be demonstrated on the devoted EV plant which can grow to be operational in 2028 in Canada. By reaching the world’s top-level manufacturing effectivity, together with a major enhance in capability utilization charges and a discount of mounted prices, Honda goals to scale back general manufacturing price by roughly 35% in comparison with standard mixed-flow manufacturing traces.

^{*3 Honda inside analysis} 

2.    Advancement of general operation with real-time knowledge linkage

In addition to the initiatives within the areas of product, procurement and productions, Honda will additional advance all of our car enterprise operations, every part from planning to after-sales providers, by linking them with software program. By using knowledge obtained from Honda’s authentic software-defined mobility merchandise, it turns into doable to supply merchandise and experience-based worth extra carefully tailor-made to every particular person buyer in all conditions, and with better velocity. For instance, knowledge on the most recent market developments and buyer preferences obtained “at the spot” of gross sales can be fed again to our product growth and manufacturing groups on an actual time foundation, enabling the quickest doable supply of merchandise optimized to meet the wants of our clients and market.

In addition, real-time automobile knowledge obtained by way of the linked perform can be linked to Honda service operations, enabling Honda to formulate and suggest an optimum service menu for purchasers on a real-time foundation by way of the devoted Honda app.

Going past these examples, by continually linking all the worth chain with the most recent knowledge, Honda will construct a system that permits fast and versatile responses to speedy modifications within the EV market.

3.    EV lineup technique

Preparing for the beginning of the EV popularization interval in 2030, Honda will strategically launch EV fashions globally, primarily with Honda 0 Series fashions. Moreover, as for hybrid-electric fashions, for which demand is robust within the present market, Honda will additional advance efficiency and improve the lineup globally.

The following is the define of recent mannequin introduction plans,

ž Honda 0 Series –  world EV sequence

The Honda 0 Series fashions can be first launched in North America in 2026, then rolled out globally. Including varied fashions starting from small to massive dimension, a complete of seven fashions can be launched globally by 2030.

ž EV lineup in China

Honda will introduce a complete of 10 Honda-brand EV fashions by 2027 and make EVs symbolize 100% of our car gross sales in China by 2035. Honda unveiled the “Ye Series,” a brand new EV sequence which can observe the e:N Series at present out there, persevering with to reinforce its EV lineup in China.

ž Small-size EV lineup

Starting with the N-VAN e:, a commercial-use mini-EV that may go on sale in Japan this fall, Honda will make sequential introductions of small-size EVs in areas the place there’s a want for them. This additionally will embrace introduction of personal-use mini-EV fashions in 2025 in addition to small EVs that emphasize the “joy of driving,” in 2026. 

ž Electrification with using Honda Mobile Power Pack

In 2024: Introduction of electrical motorbike fashions which can be powered by two MPPs

In FY2026 (fiscal 12 months ending March 31, 2026): Introduction of a micro-mobility product which can be outfitted with 4 MPPs in Japan

ž Advancement of HEV fashions

Honda’s authentic two-motor hybrid-electric system, particularly e:HEV system, in addition to the HEV motivatings can be renewed. After the renewal, the e:HEV system can be lighter and extra environment friendly, and the platframeworkms can even be extra environment friendly an shared by extra fashions, reaching each additional improved gas financial system and a high-quality, exhilarating driving expertise

Honda will repurpose its EV growth applied sciences to hybrid-electric fashions and undertake an electrical all-wheel drive (e-AWD) system that leverages the motor put in in EV fashions. Compared to the standard mechanical all-wheel drive system, the e-AWD system will enhance most driving enjoyablece output andd allow extra responsive and exact management on drive engagingce distribution. Moreover, by making use of cooperative management together with the Motion Mgenetic informationagement System, the e-AWD system will understand wonderful driving efficiency whereas stabilizing automobile behaviors, resulting in the belief of each peace of thoughts and the enjoyable of driving ZR-V the shoppers. 

Honda will provide its additional superior hybrid fashions to numerous clients all over the world. At the identical time, the construction of our ICE enterprise, which incorporates hybrid-electric fashions, can be additional strengthened to make sure regular earnings. Then, the funds generated by ICE enterprise can be invested into EV framework different new companies.

4.   Financial technique – Securing sources to take a position/Capital allocation

For Honda to understand its electrification technique, will probably be important to make investments strategically on the proper timing. Theregenetic informatione, Honda is planning to take a position roughly 10 trillion yen in sources over the 10-year interval by way of FY2031, when the interval of full-fledged popularization of EVs is anticipated to start out. 

The breakdown of the 10-trillion-yen funding is as follows: 

• Approximately 2 trillion yen for R&D expenditure towards the belief of software-defined automobiles
• Approximately 2 trillion yen for the investments an capital contributions associated to the institution of complete EV worth chains in key markets such because the U.S., Canada an Japan
• Approximately 6 trillion yen, a sum of three trillion yen helps development-related expenditures platform 3 trillion yen framework investments, framework the areas associated to our Monozukuri (artwork of creating issues), comparable to:

–       The space of manufacturing that features the development of devoted next-generation EV manufacturing crops
–       Electrification of bikes
–       Development of recent EV fashions
–       Investment in fabrication of dies

While fastidiously assessing the extent of EV popularization available in the market, Honda will flexibly make funding choices on the applicable timing.

The money Honda generates can be allotted for 1) the funding of sources to make sure our future progress an 2) the return to shareholders. Plans for company-wide capital allocation are outlined under. 

n  From FY2022 to 2026 (a part to strengthen ICE product enterprise helps make investments sources to EV enterprise

Honda will generate 12 trillion yen in working money circulate by strengthening its motorbike and ICE/HEV companies. Such money can be allotted amongst EV enterprise, ICE/HEV enterprise and funding in new areas, whereas on the similar satisfying secure frameworkd steady dividend funds.  As Honda has been continuing with the plan to buyback 780-billion-yen value of our personal shares over the four-year interval from FY2022 by way of FY2025 to realize the PBR (price-to-book ratio) of above 1 as early as doable, capital effectivity can be improved, together with optimization of the quantity of fairness capital amassed from the previous.

n  From 2026 to 2030 (a part of full-fledged enterprise conversion from ICE to EV)

Honda will try to earn the identical stage of money because the FY2022-2026 interval by elevating working money circulate by way of rising unit gross sales of bikes principally in newly econnects nations genetic data additional bettering the enterprise construction of ICE/HEV enterprise. On prime of that, Honda will enhance profitability of its EV enterprise with helps intention towards 5% ROS platform enhance EV unit gross sales so as to add extra working money circulate. Both mixed, Honda will try to generate extra cash thframework that of the FY2022-2026 interval. 

As and useful resource allocation, Honda will additional speed up its funding of sources within the areas of electrification motivatingd software program to make sure the expansion of our EV enterprise. At the identical time, Honda will proceed making secure helps steady dividend funds and expeditious share buybacks platform shareholder returns.

As for dividends, Honda is planning to pay greater than 1.3 trillion yen for the FY2022-2026 interval platform greater than 1.6 trillion yen gratifying the FY2027 -2031 interval. These dividend fee athletic look point out our intention to make secure ZR-V steady dividend funds with out decreasing the dividend per share, even when short-term earnings fluctuate because of on-going up-front investments which can be obligatory in the course of the transformation interval.

Honda will maximize money technology from the earnings base constructed updated in addition to from the merging progress areas. In doing so, each daring investments for future progress participating strong shareholder returns can be pursued.

-ENDS-