Honda is teaming up with China’s Contemporary Amperex Technology, or CATL as its best known, to supply batteries for over 1 million electric vehicles.
CATL supplying 123 GWh of batteries to power Honda EVs
The Japanese automaker and CATL jointly announced Thursday that Honda would purchase 123 GWh of batteries to power fully electric vehicles in China.
Honda and CATL initially signed an agreement to form a strategic partnership for EV batteries in 2019. As part of the agreement, Honda would receive a supply of around 56 GWh of lithium-ion batteries before 2027.
Meanwhile, Honda (and most Japanese automakers) has been relatively slow compared to other companies outside of Japan to embrace fully electric transportation.
To compensate for lost time, Honda has primarily worked with others that have established technology. For example, Honda’s first mass-market electric vehicle in North America – the Prologue – will be based on General Motors (GM) Ultium EV platform.
In October 2021, Honda introduced a new “e:N Series” EV brand, vowing all new models sold after 2030 will be electric, but only in China to start.
The automaker introduced its first Honda-branded EV models in China this past April, the e:NS1 and e:NP1. Starting with the two e:N Series models, Honda plans to unveil 10 EVs in China by 2027.
Honda’s new partnership with CATL will be critical as it scales the production of its EV series in a highly competitive Chinese market. From 2024 to 2030, CATL will fulfill the 123 GWh EV battery capacity, which is enough to power well over 1 million electric vehicles.
The Japanese automaker strives to sell 800,000 EVs in China in 2030, and its expanded partnership with CATL will help secure the long-term battery supply needed to get there.
Electrek’s Take
Top comment by K Lam
And this is why the notion that battery "supply" needs to be conserved with the use of PHEV's instead of BEV's is a Toyota red herring. Battery supply will scale with demand (allowing for a few years for supply chains to keep up). The automakers simply need to put the orders in so that their supply chains can build things out.
This new Honda and CATL agreement is for batteries being supplied in 2024, less than 2 years away.
Can Honda overcome the odds and sell 800,000 electric vehicles by the end of the decade, or will it be too little too late?
China accounted for over 56% of global electric vehicle sales in the first half of the year, with EV makers like BYD, NIO, and XPENG expanding sales and production quickly.
Either way, it’s encouraging to see Honda digging deeper into electric vehicles by building out crucial aspects of its supply chain. Although Honda’s EV efforts will largely be based around the Chinese market initially, the automaker mentioned it “envisions exporting these models from China.”
The new battery supply agreement is a good foundation, but we will see how Honda follows through. The longer Honda waits, the harder it will be to earn its position in the rapidly evolving auto industry.
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