The unwinding of the tie-up roughly a year and a half after it was announced is the latest in a string of decisions by automakers, specifically GM, to scale back or cancel previously announced EV plans.
The partnership was expected to use GM’s next-generation Ultium battery technology to produce millions of EVs that cost less than $30,000 for global markets beginning in 2027. They were set to include popular compact crossover vehicles.
Since the automakers first announced the partnership, the outlook for EVs has dimmed due to higher costs, lack of infrastructure and slower-than-expected consumer demand.
“After extensive studies and analysis, we have come to a mutual decision to discontinue the program. Each company remains committed to affordability in the EV market,” GM spokesman Darryll Harrison said in an email. “Each company remains committed to affordability in the EV market.”
Harrison said the cancellation of the program “is not connected with our plans to introduce a next generation Bolt.” However, GM CEO Mary Barra referenced the Bolt as a better option when discussing the cancellation of a $5 billion capital commitment for entry-level EVs during an earnings call Tuesday with investors.
“Our prior portfolio plans included several newly designed vehicles in the entry-level segments and a capital commitment of $5 billion over the next several years,” she said. “However, by leveraging the best attributes of today’s Bolt EUV as well as Ultium … we will deliver an even better driving, charging, and ownership experience with a vehicle we know customers love.”
Current Chevrolet Bolt models start under $30,000 without any EV incentives.
Harrison said other partnerships between the companies, including a deal for GM to build the 2024 Honda Prologue EV, continue. The companies also have partnerships around hydrogen fuel cells and autonomous vehicles.
The companies confirmed they would end the affordable EV effort after GM scaled back some near-term EV targets, announced delays in production of at least three upcoming EVs and disclosed additional details about postponing the build out of a second all-electric truck plant in Michigan until late 2025.
“We’re really focusing on making sure that we’re driving toward demand targets,” GM CFO Paul Jacobson said during a media briefing for the automaker’s third-quarter earnings. “We’re balancing production to demand.”
Honda CEO Toshihiro Mibe told Bloomberg Television on Tuesday that the company determined the affordable EV program “would be difficult as a business.”
Honda did not immediately respond for a request for comment on the cancellation of the plans.