[Auto/Moto] In strategy shift, Honda seeks to bring EV value chain in-house

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TOKYO – Honda is revising its approach to next-generation electric vehicles and will pursue a vertically integrated approach that brings everything from batteries and software to vehicle production in-house, as the company races to rein in costs as it wrestles with new technologies. The shift to a more vertical supply chain is driving Honda’s R&D spending to record levels. Honda, Japan’s second-largest automaker, needs to adopt this approach to better compete, CEO Toshihiro Mibe said Friday while announcing financial results. Honda’s push was on full display last month, when it announced it would invest $11 billion in battery and EV production in Canada. “We changed our strategy a little bit in terms of electrification, especially batteries,” Mibe said. “We are shifting to a vertical-type system to sustain a total electrification business. To do that, we must internalize these technologies. The software too must also be supported by Honda itself.”

Mibe said Honda would give more details of the strategy on Thursday in an annual business update. The strategy is a throwback to the earliest days of the auto industry when Ford Motor Co. tried to make everything from rubber to glass under its own umbrella. The approach is seeing a resurgence with its adaption to EVs by emerging players from China such as the EV heavyweight BYD. BYD has been able to control cost and technology by organizing its own supply chain vertically. In Europe, Renault Group, Volvo and Stellantis are among the automakers that have brought production of electric motors and batteries in-house. 

https://europe.autonews.com/automakers/honda-seeks-vertically-integrate-ev-value-chain