Honda is killing its EVs – with any chance of competing in the future

I understand; It’s not an easy time for a major automaker to sell electric cars, what with incentives being phased out and Chinese automakers knocking on the door. But Honda is taking it to the next level.

This week, Honda killed off its complicated — and unpromising — EV programs. What little hope Honda had to compete in the EV arena seems to be gone, and with it, any chance of surviving the current wave of chaos sweeping the industry.

The company blames US taxes and Chinese competition, two easy targets. But it never had a practical EV solution to begin with.

Honda kicked things off on Thursday by halting development of the electric Acura RDX and the Honda 0 sedan and SUV, three models that were the company’s first EVs – but of which very little was shared with outsiders. It continued on Friday, with Automotive News to announce that Honda will stop making the Prologue, a car that was designed and built entirely by GM.

The idea can come back in many different ways, but there are two that I would argue are the most important. By keeping EVs, Honda will be at the forefront of two major trends sweeping the automotive market: electric drivetrains and software-defined vehicles.

You missed the EV opportunity

For Honda — and for many automakers already in transition — the EV is the only vehicle with a different drivetrain. I can imagine that the Honda executives think they can wait for the replacement period and, once the motor and batteries are sorted, they will just change the oil. How hard can it be?

That’s a mistake, of course. Many car manufacturers have found that throwing batteries into a car designed to be an internal combustion engine is not a good idea. It can shorten the development cycle, but the result is heavy, inefficient, and expensive to produce.

When developed as an early product, EVs give automakers a chance to rethink the vehicle, and in the long run, make it more affordable.

Take Ford, for example. The Mustang Mach E has been a success for sales, but not for Ford’s money. The Mach E is based on a heavily modified platform that also underpins the Escape, a gasoline-powered crossover. One of the challenges, Ford CEO Chris Farley said in a recent interviewit was the engineering decisions that brought the thing back: The Mach E’s wiring harness is 70 pounds heavier than Tesla’s, for example. Small mistakes like these add up in something as complex as a car.

Honda will also miss several opportunities to learn. There is learning and doing, both in development and production. There is also learning to develop new suppliers and supply chains. It will also miss out on important customer feedback – what do people get out of their EVs?

Sayonara, software-defined vehicles

Here, Honda is setting itself up for failure in the second disruption sweeping the auto industry: software-defined vehicle (SDV), which has an initial capability that can be upgraded and improved over time.

Consumers, especially those who buy EVs from Tesla, Rivian, and BYD, are used to frequent updates, infotainment software, and driver assistance systems from Tesla, Rivians, Nio, or Xiaomi. Honda is still very advanced in each of the domains.

SDVs don’t have to be EVs, but they tend to go hand in hand. The large battery in an EV makes it easy to power the computer’s power, and it allows things like air conditioning to be done when the car is parked and “turned off.” Can Honda make an SDV fuel oil? Sure, but it’s unlikely because the same reason is behind EVs: the old way of doing things is easier and more profitable, for now.

What does Honda stand for?

Honda is facing a problem. At its core, it is an internal combustion engine company. It makes great engines, and it’s getting less and less.

Some of the characteristics of his cars are also beaten. Over the years, the company has prided itself on manufacturing passenger cars. They are light, functional, and work well. But when a car drives itself, what does a “driver’s car” mean?

Apart from autonomy, I would say that the market for self-driving cars is limited. People are attracted to Honda because they are reliable and affordable. The fact that they are working well is the icing on the cake, perhaps helping consumers break a tie if it is torn between two brands.

But EVs promise to be more reliable than gasoline cars, and as Chinese automakers point out, when battery prices drop, so do overall vehicle costs. If Honda can’t compete on reliability or price, consumers will balk.

This already seems to be happening in China. Honda said the same recent report. “Honda has not been able to deliver products that offer value for money better than those of new EV manufacturers, resulting in less competition,” the company said. Typhoons in China contributed to the company’s nearly $16 billion in losses last year. With no plan for EVs, it’s only a matter of time before Honda suffers the same fate elsewhere.