Honda’s new CEO switches gear in embracing alliances for electric vehicles

Tokyo — Honda Motor has long eschewed big strategic alliances, preferring to go it alone even as many of its car-making peers banded together to improve economies of scale. That strategy is changing now that the Japanese automaker is shifting more aggressively to electric vehicles (EVs).

“It will be extremely risky for Honda to push the move alone,” CEO Toshihiro Mibe said in an interview on Tuesday. “It’s meaningful to form alliances, mass-produce and lower costs to make our business sustainable.”

Speaking at Honda’s Innovation Lab in central Tokyo, Mibe said the company is open to working with others in different industries when it comes to developing software used in EVs.

“Even if we make the electric cars, it’ll be extremely hard for Honda to develop software alone,” said Mibe, who helped lead R&D efforts at the company before becoming CEO in April. “Honda won’t hesitate to form alliances with companies that are strong in their field if that creates value promptly.”

In April, Honda became the first Japanese carmaker to state publicly it will stop selling petrol-powered vehicles, setting a target to phase them out completely by 2040. Given that EV penetration in Japan is just 1%, there’s strong growth potential for early movers, with global sales forecast to climb sharply in the coming years.

In 2018, Honda was in talks with Alphabet’s self-driving car unit Waymo to develop autonomous vehicles, but those discussions collapsed over issues related to technology access and balancing the relationship. It invested in and partnered with General Motors’s (GM) Cruise instead.

Aside from collaborations with GM in areas such as battery technology, Honda has followed a staunchly independent path, particularly when compared with other Japanese carmakers. That’s shifting under Mibe, though he wouldn’t disclose any names of companies Honda may form new partnerships with.

“We still want to discuss with various companies in various fields,” he said. “I believe in creating new value by becoming partners with non-auto companies, so we haven’t narrowed them down.”

Bloomberg News. More stories like this are available on bloomberg.com