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May 16thCryptogamesgamblingHonda updated its global electrification strategy.
Honda announced that it would invest about 10 trillion yen in resources by fiscal year 2030. Among them, software-defined vehicle-related R & D expenditure will account for about 2 trillion yen; the United States, Canada, Japan and other markets need to invest and contribute about 2 trillion yen to build an integrated value chain for pure electric vehicles. Production areas such as the next-generation pure electric vehicle special factory, second-round electrification related expenses, automobile new model research and development expenditure, mold investment and other product manufacturing related costs total about 6 trillion yen (including R & D expenditure of 3 trillion yen, investment and investment of 3 trillion yen).
The operating rate of return on pure electric vehicles is expected to reach 5%.
Honda said that the main purpose of the fiscal year from 2021 to 2025 is to consolidate the traditional fuel vehicle product industry and the pure electric vehicle business resource allocation stage, by strengthening the second wheel business and the traditional fuel vehicle / hybrid business physique, it is expected to generate 12 trillion yen in operating cash flow.
The cash flow will be used to invest in electric businesses, traditional fuel vehicles / hybrids and new areas, as well as stable and sustained dividends. In order to achieve more than 100 times price-to-book ratio as soon as possible, Honda will strive to improve capital efficiency in the future, including optimizing its own capital accumulated in the past. Honda has made 780 billion yen in share buybacks in the four years from fiscal year 2021 to fiscal year 2024. " Honda said.
In the following fiscal year from 2026 to 2030, it is defined as the formal transition from traditional fuel vehicles to pure electric vehicles. Honda expects operating cash flow at this stage to be the same as in fiscal year 2021-2025. "to achieve the 5 per cent operating return (ROS) target for pure electric vehicles, we will increase operating cash flow by increasing profitability and sales, thus striving to create more cash flow than in the 2021-2025 fiscal year. In terms of resource allocation, Honda will further accelerate its investment in electrification and software to promote the growth of pure electric vehicle business. At the same time, in terms of shareholder returns, we will continue to pay dividends steadily and gain flexible access to our own capital. " Honda said.
In terms of dividends, Honda plans to pay a dividend for the fiscal year 2021-2025.CryptogamesgamblingMore than .3 trillion yen, and a dividend of more than 1.6 trillion yen in 2026 to 2030. "We will make the most of the cash created by the established profit base and new growth areas to invest decisively while paying attention to returns to shareholders." Honda took the service and on behalf of the executive service president Min Hiroshi said.
It is worth noting that Honda pointed out that in the case of drastic changes in the electrified market environment, some areas believe that the current development speed of the pure electric vehicle market has slowed down. There should be a variety of different solutions to Honda's vision of "carbon neutrality in 2050", including large mobile tools such as aircraft and ships.
However, Minhong stressed that "Honda still regards pure electric vehicles as the most effective solution in the field of small mobile tools such as second wheels and cars, and in the long run, we believe that the transformation of pure electric vehicles will continue to move forward steadily." Honda's goal of achieving 100% of global sales of pure electric vehicles and fuel cell vehicles by 2040 has not changed. We will not be too obsessed with the current changes, but will focus on the upcoming popularization of pure electric vehicles in the second half of the 2020s, and build a strong pure electric vehicle brand and career cornerstone from a medium-and long-term point of view.
Honda 0 series models will be launched in 2026.
According to the plan, Honda's pure electric vehicles and fuel cell vehicles will account for 40% of global sales by 2030, and the annual production of pure electric vehicles will reach more than 2 million.
To achieve this goal, Honda will strengthen three major initiatives, including the introduction of pure electric models, the building of an integrated value chain with batteries as the core, and the optimization and upgrading of production technology and factories.
"We will choose the right time to make investment decisions, while steadily advancing the above three points, strive to achieve a 5 per cent operating profit margin (ROS) in the pure electric sector by 2030, and will further strive to improve profit margins with the goal of achieving self-reliance in the pure electric vehicle business." Miku Minhong said.
Specifically, at the electric product line level, Honda will launch products around the world with the main pure electric product-Honda 0 series as the core, while further improving the technical performance of hybrid power and expanding the product lineup worldwide.
It is understood that at the beginning of this year's CES 2024, Honda released two Honda 0 series concept models-the SALOON and the SPACE-HUB. Among them, the SALOON will be officially launched as a flagship model in 2026. Starting from 2026, Honda 0 series models will be the first to be launched in the North American market, and seven models will be launched worldwide by 2030, covering all types of large, medium and small models.
In China, Honda will continue to expand the lineup of pure electric products through the eRover N series and the new brand "Ye", launching 10 pure electric vehicles by 2027, and striving to achieve the goal of 100% sales of pure electric vehicles by 2035.
Honda will also launch related products one after another in areas where there is a market demand for small pure electric cars. For example, in the autumn of 2024, N-VAN is expected to launch a light commercial all-electric vehicle "Honda e:" in Japan; in 2025, Honda plans to launch a light passenger all-electric vehicle; and in 2026, Honda will launch a small all-electric car that highlights the fun of handling.
In addition, Honda will upgrade its dual-motor hybrid system "e:HEV" and its platform, and transfer pure electric vehicle research and development technology to hybrid vehicles, using the motors carried on pure electric vehicles to achieve electric four-wheel drive.
"in addition to providing hybrid models to customers around the world, we will also ensure stable profits by strengthening the business health of traditional fuel vehicles, including hybrid vehicles, and invest the resulting funds in new businesses such as pure electric vehicles." Honda said.
For the core component of pure electric vehicles-the power battery, Honda also proposed a phased advancement strategy. First, in the early 2020s, in the field of liquid lithium-ion batteries, Honda will strengthen cooperation with external companies in various regions to ensure that it can stably purchase the required number of batteries while controlling costs; in the mid-2020s, Honda will Start joint ventures with cooperative companies to produce batteries. Taking the U.S. market as an example, the battery factory jointly established by Honda and LG Energy Solution will be put into production in 2025, and the annual battery output will reach 40GWh; in the late 2020s and in the future, Honda will further expand its business areas, from raw material procurement to Vehicle production, to secondary utilization and recycling of batteries, to build a vertically integrated pure electric vehicle value chain with batteries as the core. Among them, in Canada, Honda will begin to independently produce battery products jointly developed with GS YUASA.
Honda said,"We hope that through these efforts, by 2030, battery procurement costs in North America will be reduced by more than 20% on the current basis. In addition, it will ensure that each region has the best access to the batteries it needs to meet the production plan of approximately 2 million pure electric vehicles."
At the production level, Honda said that from now until the mid-2020s, it will make maximum use of existing production equipment, simultaneously carry out mixed-flow production of traditional fuel vehicles and pure electric vehicles, and introduce advanced technologies needed to realize "Thin, Light, Wise"(i.e. slim, light, and smart).
Taking the battery pack assembly line as an example, Honda will be the first to introduce its own "Flex Cell Production System". The system combines modular components with unit production methods based on the product functions of the vehicle. In addition, Honda will also use digital twins to reproduce the actual situation of the production line in real time in cyberspace to optimize production efficiency (including component supply, output and speed to the factory) to ensure that products can be provided in a timely manner based on market demand.
Honda said that it will further expand the application scope of these technologies in the future. In addition to the production line of battery packs, it will also apply and deploy them in all pure electric vehicle production lines. Eventually, the project will be applied in a pure electric vehicle factory in Canada, which will be put into operation in 2028.
"Including significant operating rate increases and fixed cost reductions, we will strive to achieve a high level of global production efficiency, which will save approximately 35% of production costs compared to previous mixed-flow production lines." Honda said.
In addition to product, procurement, and production-related measures, Honda will also comprehensively improve the entire chain of operations from product planning to after-sales services through software integration. "We will also be linked to the latest data at any time across the entire value chain, thereby building an organic system that can quickly and flexibly respond to rapid changes in the pure electric vehicle market." Honda said.
Cover picture source: Daily Economic News Data Map