Introduction: GM and Honda will release the upcoming cooperation model, whose flesh, and whose soul?
(Text/Pan Yuchen Editor/Lou Bing) "The cooperation between the two companies can enable users around the world to quickly drive electric vehicles than to fight alone. For the alliance with GM, toshihiro Mibe, president and CEO of Honda Motor Co., who has just completed a year in office, said.
Just on April 5, the two companies announced that they would deepen their partnership to jointly develop a series of affordable electric vehicles. These electric vehicles are based on a new global architecture and use GM's next-generation Ultium battery technology.
The statement said the two companies will leverage their technology, design and sourcing strategies to produce millions of electric vehicles worldwide starting in 2027 and selling more than 13 million vehicles a year.
Doug Parks, GM's executive vice president of global product development, procurement and supply chain, said the two companies first plan to launch a new all-electric model in North America at a lower price than the upcoming Chevrolet Explorer pure electric version, and plan to reach capacity of 2 million units by the end of 2025.
In addition, GM Chairman and CEO Mary Bora and Mibe Toshihiro also pointed out in a joint statement that these cooperative models will be available to major regional markets around the world, including North America, South America and China.
The statement also said that GM is already accelerating the development of new technologies such as lithium, silicon cells and solid-state batteries. Honda has already built a demonstration line for all-solid-state batteries in Japan and is moving towards mass production.
However, the capital market did not look up to the transaction.
On April 5, the U.S. stock market closed, GM and Honda shares fell 8.4% and 3.92% respectively, and then continued to fall in the next two days, as of the U.S. stock close on April 7, GM and Honda shares fell further by 1.97% and 3.17%, closing at $38.72 and $25.99.
Friend? Sharp words come first
GM's partnership with Honda on electrification is not a whim.
As early as 2013, the two companies have reached a cooperation on the development of next-generation fuel cell systems and hydrogen storage technology, but due to the high cost of hydrogen fuel cells, it is difficult to promote the energy replenishment channel, although both sides have fuel cell technology reserves, but since the announcement of cooperation, the two sides have not seen the actual results of fuel cell vehicles.
It wasn't until 2018 that Honda joined GM's battery module development efforts that it opened a new page in the partnership between the two sides.
In April 2020, GM and Honda announced joint development of two new all-electric models. Honda will be responsible for the styling and interior of its new car, while GM will provide Aoteneng battery technology and a new generation of modular electric platforms. Both models were later confirmed to be the same Astronergy platform as cadillac LYRIQ, the Honda Prologue to be launched in early 2024, and the first electric SUV of the high-end brand Acura.
In September of the same year, GM and Honda formally signed a memorandum of understanding to form an automotive business alliance in North America, develop models for their respective brands in the form of alliances, and cooperate in procurement, research and development, and vehicle networking services to share the vehicle platform and the matching electric drive system.
Of course, for traditional car companies that have made a lot of money in the era of fuel vehicles, it is not an easy task to take the initiative to seek change.
In fact, before GM and Honda "made friends", both sides also tried to explore the "new four modernizations".
Back in 2007, GM launched an electric concept car called the Chevrolet Volt. But it wasn't until the Chevrolet Bolt hit the market in 2016 that GM gained influence in the burgeoning U.S. electric vehicle market. At the same time, GM has also reached a partnership with power battery supplier LG to provide batteries for Bolt models.
In September 2018, GM announced a $28 million investment in expanding its technology center in Warren, Michigan, to build new laboratories and equipment to produce next-generation batteries, and plans to launch 20 electric vehicles by 2023. At the same time, GM also plans to focus on the development of a fast charging system within 10 minutes.
Since the launch of the Chevrolet Bolt, the model has sold more than 140,000 units in the United States, second only to the Tesla Model 3. However, due to defects in the early battery design, Bolt has had a number of spontaneous combustion incidents since 2020, and GM has had to recall all 140,000 cars previously sold, and LG, as a battery supplier, has also been forced to compensate GM for $1.9 billion.
Bolt's problems make it more urgent for GM to develop new cars based on new platforms and battery technologies. In 2021, GM officially released a new platform led by Aoteneng battery technology, and the first model based on the platform was the high-end brand Cadillac LYRIQ.
However, the model will not roll off the production line until March this year at the plant in Tennessee, USA, and other regions, including China, may have to wait for a long time.
Compared with GM, Honda has always used hybrid technology as the dominant strategy for fuel economy. In order to circumvent the technical barriers of Toyota's THS, Honda launched the i-MMD hybrid technology in 2013, which became a presence that could compete with Toyota.
Honda's hybrid models have achieved good sales in major markets such as the United States and China. However, as major industrial countries tighten their emission policies and establish "double carbon" targets, technologies such as oil-electric hybrids, which survive in the cracks, are no longer regarded as pure new energy vehicles.
An unavoidable topic is that traditional automakers are accelerating their electrification transformation, more limited by the policy pressure of various countries, and the impact of new electric vehicle forces such as Tesla has deepened the sense of crisis of traditional giants.
Of course, GM and Honda were eventually able to come together on electrification, and the current leaders of the two companies, Mary Bora and Toshihiro Mibe, undoubtedly played a decisive role.
Bora joined GM in the 1980s, but it became known after becoming CEO and chairman in 2014. Bora proposed a "zero accident, zero emission, zero congestion" policy for GM, and focused on three major markets in North America, South America and China by reducing business and layoffs in niche regional markets, thereby improving the company's profitability.
In 2021, even in the face of the test of the epidemic and chip shortage, GM still achieved a net profit of $10 billion, a record high. Bora's streamlined cost reduction operations laid the foundation for the company to increase its investment in research and development for electrification and autonomous driving.
Toshihiro Mibe only succeeded his predecessor Takahiro Hachigo as President and CEO of Honda in April last year. During Hachigo Takahiro's tenure, his conservatism in the field of electrification drew much criticism. In particular, its adherence to the idea of giving priority to hybrid models has made Honda's pure electric vehicle development lag behind the competitive trend.
After Toshihiro Mibu took office, he changed Honda's previous style of adhering to "independence" and chose to form alliances with partners, claiming that Honda would be "not a car company" and would fully embrace pure electric vehicles.
After reaching an internal consensus on electrification goals, the two companies also unveiled their respective "double carbon" timelines: GM aims to achieve zero emissions of passenger cars in the United States by the end of 2035 and global carbon neutrality by the end of 2040; Honda plans to achieve pure electric or fuel cell vehicles in 2030, discontinue fuel vehicles in 2040, and achieve global carbon neutrality by 2050.
However, in order to achieve large-scale production of electric vehicles, it is necessary to reduce the production cost of electric vehicles led by core components such as batteries, which is also the consensus of car companies on the transformation of electrification. Honda Motor Executive Director Shinji Aoyama admitted in a joint statement that if you want to achieve carbon neutrality, you must reduce the cost of electric vehicles.
As Toshihiro Mibu said, the two companies are more efficient at working together on electrification than one company alone. Through cooperation, the two sides can share technology to share R&D costs, improve production efficiency, and at the same time, through the scale effect of the alliance of car companies, enhance the bargaining power of suppliers, thereby further reducing production costs.
In addition, as a local car company in the United States, GM has long occupied the top of the sales list of the US car market, and was not surpassed by Toyota until last year; and Honda, which is also a Japanese company, is one of the highest-selling foreign car companies in the United States. Through the new "U.S.-Japan alliance," the leading position of both sides in the U.S. market will be further consolidated.
GM's collaboration with Honda goes beyond electrification, but also includes the future direction of autonomous driving. In 2016, GM acquired Cruise, a self-driving technology startup. Subsequently, the two companies will jointly develop the Cruise Origin self-driving car designed for delivery based on Cruise, and the gmirectional Cruise assist function will also be introduced on the pure electric model jointly developed by the two companies. GM's OnStar service will also be integrated with Honda's HondaLink.
alliance? Divide and merge
The GM-Honda Alliance is not an industry first. Throughout the development history of the automobile industry in less than 150 years, there have been a number of corporate alliances that come together because of common interests, and mergers and acquisitions are not uncommon, but the reasons and outcomes of different alliances are also very different, and the reasons why most groups part ways are also due to economic pressure and conflicts of interest.
In the case of General Motors, it was itself composed of Buick's merger of companies such as Maxwell, Oz, Oakland and Cadillac, followed by the acquisition of Brands such as Chevrolet, Opel, Vauxhall, and Daewoo, until the bankruptcy reorganization after the subprime mortgage crisis in 2008.
GM's local rival, Ford, acquired or participated in famous car brands such as Mazda, Jaguar Land Rover, Volvo and Aston Martin since the 1970s. But then it was also threatened by the subprime mortgage crisis, and Ford had to sell most of its brands to ease the pressure.
Founded at the end of the 20th century, the Daimler-Chrysler Alliance was once the world's second-largest automobile group, but The Chrysler sector's consecutive losses have been dragging Daimler down, and the league was eventually spun off in 2007.
The largest multinational automotive group in existence is the Renault-Nissan-Mitsubishi alliance, which ranks among the top three in terms of global sales. In the 1990s, when Nissan was on the verge of bankruptcy, Renault acquired nearly 40% of Nissan's shares and turned its losses into profits with Carlos Ghosn as Nissan's CEO. In 2002, Nissan also acquired a 15% stake in Renault to form a cross-shareholding, and later merged Mitsubishi into the alliance in 2016.
However, the contradiction between Renault and Nissan has always existed due to the uneven distribution of benefits. Since 2018, Ghosn's arrest and escape have further caused the alliance to fall apart for a time.
Toyota, the world's largest car company, has also been attracting its japanese brothers in recent years. Since 2017, Toyota has successively invested in Japanese second-tier brands such as Mazda, Suzuki and Subaru, and further covered the influence of these brands in overseas markets such as Southeast Asia.
In recent years, the most influential equity alliance has been the Stellantis Group. In 2021, PSA merged with Fiat Chrysler (FCA) to form the Stellantis Group, making it one of the top five car companies in the world. The alliance between the two sides mainly revolves around the integration of the platform, joint procurement, and cost reduction. It is worth mentioning that FCA had considered merging with Renault before joining forces with PSA, but it was unsuccessful due to obstruction from the Ghosn incident and Nissan.
Before reaching an alliance with GM, Honda has always been a relatively maverick presence among Japanese car companies compared with Japanese counterparts such as Toyota and Nissan. In August 2020, then-Japanese Prime Minister Shinzo Abe wanted to push the two giants of Honda and Nissan to restructure, but both sides refused.
However, under the energy crisis brought about by the new crown pneumonia epidemic, supply chain instability and international situation, the phenomenon of automotive giants huddled together for heating has become more common. But today's auto unions exist more in exchange for technology than on equity transactions than for auto conglomerates born in the last century. In addition to the GM-Honda alliance, the most influential technology alliance in recent years is volkswagen-Ford.
In June last year, Volkswagen and Ford motor vehicles formally signed a strategic alliance agreement. Similar to the GM-Honda Alliance, Volkswagen and Ford collaborate primarily in commercial vehicles, electrification, and autonomous driving. However, the two sides particularly emphasized that the alliance does not involve equity transactions and remains a "competitor" in the traditional field.
Compared with the GM-Honda alliance, the Volkswagen-Ford alliance is more complementary. The two car companies are the dominant players in the European and American markets, with a clear division of labor, and each other's "well water does not violate the river water". Volkswagen's demand for the U.S. commercial vehicle market and autonomous driving, as well as Ford's demand for electrification platforms, can be found in each other.
In contrast, GM and Honda's dominant markets are in North America, and the nascent alliance is a regional partnership. Although the two sides stressed in the statement that the new car will also be targeted at other regional markets such as China and South America, considering that cadillac LYRIQ has just rolled off the production line in the United States, low-cost models will have to wait until 2025 at the earliest. The new alliance can only be established on the basis of consolidating the North American market.
Take a look:
Without a shrewd mind, you can also find that the upcoming cooperation model between GM and Honda is essentially "the body of Honda and the soul of GM".
In the layout of pure electric technology, GM is obviously the party that has gone further. Although Honda has also drawn a big pie such as the "e platform" for pure electric technology, it is obviously not as reliable as the "take-ism" of General Motors to truly generate mass production results.
But given that new cars will take at least a few years to produce, the regional alliance between GM and Honda is now more symbolic than practical. Judging from the feedback from the capital market after the news was announced, investors did not give this emerging automobile alliance too much expectation.
Even in the pure electric layout of traditional car companies, GM still lags behind Volkswagen, led by the MEB platform. In the U.S. base camp, with the spontaneous combustion of the Chevrolet Bolt, the GM electric vehicle with a sharply reduced reputation is also facing challenges from local rivals such as Ford.
What's more, in China, the world's largest new energy vehicle market, GM and Honda are still playing the role of catch-ups.
The consensus in the industry is that whoever can control the Chinese market will be able to take the initiative in global electrification. At present, global new energy industry leaders such as Tesla and BYD are enterprises that have achieved excellent sales results in the Chinese market.
However, the attachment to the vested interests of the internal combustion engine has made the GM-Honda alliance slow down a lot after all. Although GM has introduced the Aotene platform and Cadillac LYRIQ to China in the second half of last year, and built a factory in Shanghai to produce electric platform models. However, the new car with a pre-price of up to 400,000 yuan has not helped GM electric vehicles to quickly increase in China.
As for Honda, it has been attached to the independent electric products of Chinese joint venture partners in the early days, responding to the double point policy in the form of "resale", until last year, it was hastily released two e:N Chinese special models, and it is suspected that it is based on the Binzhi platform transformation. In terms of specific production and sales distribution, Honda is still continuing the "double vehicle strategy" of traditional fuel vehicles, so that the two joint venture partners in China are fighting for each other: Dongfeng Honda's e:NS1 has been announced to be listed in late April; Gaga Motor Honda e:NP1 has not been released synchronously, but has taken an exclusive Chinese name for the new car "Ji Pan"...
As for whether the "two-vehicle strategy" can help Honda electric vehicles quickly gain market share in China, it is earlier than Honda's layout, and Volkswagen, which uses pure electric platforms, has given the answer...
With the domestic automobile "new four modernization" reform into the deep water area, more and more new players are constantly joining the battle, traditional car companies are also passively responding, China's new energy vehicle market competition will only increase the intensity. In contrast, how can the GM-Honda Alliance, which has not yet completed its layout in the North American market, play a cooperative advantage in China with a weak foundation and meet more and stronger rivals?
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