The electric vehicle (EV) market continues to expand. Honda and Sony recently announced their plans to create their first EV by 2025. These two business giants have reached an agreement outlining their intent to establish a “new company,” soon to start planning for joint development, sales, and commercialization of high-value battery EVs.
What Are The Details Of This Agreement?
With this new agreement between Honda and Sony, they plan to bring together the best of both worlds in hopes of bringing some new developments to the automotive industry.
In preparation for the next generation of mobility and services, Sony’s expertise in developing and applying imaging, sensing, telecommunications, network, and entertainment technologies can contribute. On Honda’s side, their mobility development capabilities, vehicle body manufacturing technology and after-sales service management experience will help this agreement a pure reality.
Sales from the “new company” are expected to begin in 2025, but with a twist. New EVs will be planned, designed and developed for sale, but this new company will not own or operate any manufacturing facilities. That means the manufacturing responsibilities of the first EV will fall onto Honda’s shoulders while Sony will be in charge of the development of a mobility service platform.
In a comment from Kenichiro Yoshida, Representative Corporate Executive Officer, Chairman, President and CEO, Sony Group Corporation, he stated:
“Sony’s Purpose is to ‘fill the world with emotion through the power of creativity and technology.’ Through this alliance with Honda, which has accumulated extensive global experience and achievements in the automobile industry over many years and continues to make revolutionary advancements in this field, we intend to build on our vision to ‘make the mobility space an emotional one,’ and contribute to the evolution of mobility centered around safety, entertainment and adaptability.”
Toshihiro Mibe, Director, President, Representative Executive Officer and CEO, Honda Motor Co., Ltd., also released a statement:
“The New Company will aim to stand at the forefront of innovation, evolution, and expansion of mobility around the world, by taking a broad and ambitious approach to creating value that exceeds the expectations and imagination of customers. We will do so by leveraging Honda’s cutting-edge technology and know-how in relation to the environment and safety, while aligning the technological assets of both companies. Although Sony and Honda are companies that share many historical and cultural similarities, our areas of technological expertise are very different. Therefore, I believe this alliance which brings together the strengths of our two companies offers great possibilities for the future of mobility.”
What’s The Current State Of The EV Market?
Believe it or not, while the auto industry was hurting bad back in 2020, seeing a decline of 23% in the United States alone, the EV market was actually thriving. Back then, the market saw record-breaking growth of approximately three million sales, a 40% increase from 2019.
That same market also saw significant sales growth in both China and Europe. Why is this relevant? Because the EV market is continuing to grow, and it’s growing fast.
In 2021 alone, EV registrations saw a massive increase around the world. The United States saw a rise of 297,000 while both Europe and China had even more at 1.06 million and 1.149 million. Some even estimate that this market could quadruple by 2030 at $957 billion.
So, to answer your question, the EV market is continuing to thrive, showing no signs of slowing down.
Could This Be The Time To Trade Up?
With the ongoing conflict between Russia and Ukraine, cars in the North American region are being hit hard in the gas tank. It was recently estimated after the carbon tax increases next week, the average cost to fill up a car in Canada could climb to an all-time high of $107. Is anyone else missing the ’90s?
According to Forbes, the EV market has been soaring in sales since the hike in gas prices. It’s estimated that EV sales will go as high as 670,000 this year, according to a forecast by market consultant AutoPacific. That’s a 37% increase from last year.
Not to mention that experts are also now saying that electric cars are three to six times cheaper to drive now, thanks to the gas inflation.
Right now, a new electric vehicle can run you up a bill of $40,000, which is a pretty average cost for a car. However, Olivier Trescases, a professor of electrical and computer engineering and director of the Electric Vehicle Research Centre at the University of Toronto, states that this price needs to be lower, below $30,000, to compete with gas-powered cars. With the pandemic’s economic effect, many will continue to struggle simply purchasing a new vehicle, regardless of their payment plan.
This price also doesn’t include the accessories required to maintain your EV, including an at-home charging station selling for around $1,000. Trescases also mentions that this price should be lowered to about $250 to be financially sustainable for today’s economic climate.
If gas prices don’t improve in the next few years, there’s a very high chance that demand in the EV market will continue to grow. Unfortunately, that won’t be an easy transition for many lower- and middle-class households with all these high prices.
After that, discussions will continue about whether EVs are legitimately better for the environment. Spoiler alert, many criticisms of producing the batteries and the amount of power required to charge determine that they might not be.
