General Motors (GM) and Honda have announced they are no longer working together to jointly develop electric vehicles (EVs). The two companies announced the $5 billion partnership last year, aimed at producing affordable EVs that cost less than $30,000 to take on Tesla.
According to a joint statement from GM and Honda, the decision to withdraw from the partnership, which was supposed to result in millions of lower priced EVs, was mutual. However both companies say they will continue to develop EVs, with Honda saying they still intend to sell only electrified vehicles by 2040. The partnership was originally intended
“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,” the companies said in a joint statement.
The decision to end the partnership comes one day after GM announced they were scaling back their own EV ambitions. After releasing their Q3 earnings reports, GM CEO Mary Barra said the company has decided to slow the launch of several EV models and cut back on EV product spending in an effort to manage costs effectively.
As part of that decision, GM is scrapping their goal of producing 400,000 EVs between 2022 and mid-2024. The company also said they were abandoning its previous plan to invest $5 billion in developing new entry-level EVs, which we now know was their partnership with Honda.
While GM and Honda are ending this partnership, the two companies announced another partnership earlier this week. GM, Honda and Cruise, GM’s self-driving subsidiary, announced a new joint venture with plans to introduce a driverless taxi fleet in Tokyo by early 2026.