GM, Honda plan to co-develop affordable electric vehicles

General Motors and Honda are planning to co-develop some affordable electric vehicles (EVs) that will use GM’s next-generation Ultium battery technology.

The vehicles, which will include a compact crossover, are expected to begin going on sale in North America in 2027.

Doug Parks, GM executive vice president of global product development, says they plan is to have an EV priced lower than the upcoming Chevrolet Equinox EV. GM plans to roll out an electric Equinox small SUV next year with a starting price of around $30,000.

The automakers will work together on battery chemistry, vehicle engineering, and manufacturing to drive down costs as they prepare to build what the companies expect will be millions of EVs for sale worldwide starting in 2027.

“An EV priced below $30,000 with a range above 300 miles per charge would be appealing to buyers globally,” said Ivan Drury, a senior manager at Edmunds.com. “That is where so many consider both internal combustion engine and electric vehicles. Right now, when you look at what’s for sale, there’s nothing transacting in that area that checks the box of EVs that go the distance.”

Drury said Honda has been building vehicles in the U.S. for many years, so it shouldn’t be a big adjustment to work with GM.

Honda currently needs GM’s battery technology, so this deal allows Honda to keep working with GM to learn and share development costs. “GM can also share some costs to help fund this expensive transition” to electric vehicles, said Morningstar analyst David Whiston.

Last year the companies announced GM would build one Honda SUV and one Acura SUV using its Ultium-branded electric vehicle architecture and battery system. The Honda SUV will be named the Prologue, and both SUVs would have bodies, interiors, and driving characteristics designed by Honda. The Prologue will go on sale in early 2024, with the Acura following soon.

Honda plans to make its own electric vehicles later this decade.

GM and Honda have successfully partnered over the years. In 2013 the companies started working together on the co-development of a next-generation fuel cell system and hydrogen storage technologies.

In 2018 Honda and GM announced that they’d team up to develop batteries for electric vehicles, mostly for the North American market.