Honda to Create New Division to Speed Up EV Development, and More

Photo: Honda

Honda announced plans on Tuesday to debut a new company division to help strengthen and accelerate the electrification of its lineup.

The news is just the latest in automakers looking to separate out their businesses to better focus on catching up to leaders Tesla and BYD in the emerging EV sector.

The changes are set to become effective at Honda starting on April 1, 2023, officially creating a separate division to focus on electrification in auto and motorcycle development, along with power products including generators, according to the statement. Honda says it will be carbon neutral by 2050.

The new division will be called the Electrification Business Development Operations.

“This operation will consolidate the business strategy and BEV product development functions of automobile business and electrification-related strategy and development functions of motorcycle and power products businesses to further strengthen and accelerate Honda’s electrification business,” said Honda.

Structurally, the change will reduce the six current regional operations to just three, including North America, China, and specific regions in Japan along with the rest of Asia and Europe.

The reduction of regions is expected to help the automaker “rapidly develop the implementation of resource shifts in accordance with the future lineup strategy in line with the electrification acceleration,” a Honda spokesperson said in a media briefing to Reuters.

Last year, Honda debuted plans to develop as many as 30 EV models worldwide by 2030, targeting an annual production output of two million electric units in the same time period.

Also new will be the Corporate Strategy Operations and Corporate Administration Operations.

Honda says the Corporate Strategy Operations will “further strengthen Honda’s initiatives in formulating, executing and communicating its corporate strategies toward new value creation, and the Corporate Administration Operations will pursue the total optimization of corporate resources, which is aligned with corporate strategy.”

Honda concluded its announcement by saying, “by further accelerating the series of initiatives Honda has been taking to transform itself through electrification and new value creation, Honda strives to remain and become even more recognized as “a company society wants to exist” in the electrified era.”

Honda has announced a joint venture with Sony to develop EVs by 2026, and it’s currently building a new battery plant in Ohio, U.S. in partnership with LG.