Japan – Summary of 2023 Honda Business Briefing

Honda Motor Co., Ltd. today held a press briefing on the progress it has achieved toward its business transformation and electrification. The Honda executives presenting at the event included the following:

– Toshihiro Mibe, Director, President and Representative Executive Officer
– Shinji Aoyama, Director, Executive Vice President and Representative Executive Officer

A summary of the briefing follows:

1. Five Key Factors Honda is focused on

Honda strives to realize the joy and freedom of mobility for people around the world with zero environmental impact and zero traffic collision fatalities involving Honda motorcycles and automobiles. In so doing, Honda wants to be a company that serves as a driving force for many people to realize their dreams and move our society forward. To achieve this challenging goal, Honda has been strengthening its business structure and will focus on the following areas, which Honda identifies as the five key factors for the advancement of mobility.

1) Carbon neutrality of power units
2) Energy management system that enables the use of power units as an energy source
3) Resource circulation
4) AD (automated driving)/ADAS (advanced driver-assistance system)
5) IoT (Internet of Things)/Connected

2. Strengthening of Business Structure

<Improvement of the earnings structure>
Honda has made steady improvement of its earnings structure for automobile business over the last several years by implementing various measures including the introduction of Honda Architecture and a “series planning” system for new models, reduction of the total number of variations at the trim and option level for global models and optimization of production capacity. For FY2023 (fiscal year ended March 31, 2023), the amount of fixed costs was reduced by more than 10% compared to FY2019, and the break-even point based on the percentage of production capacity utilization was roughly 80%, a significant improvement from roughly 90% in FY2019.

Moreover, due partly to the contribution of motorcycle business, which has established a strong earnings structure, Honda has been able to secure a sufficient level of free cash flow despite the tough business environment. Going forward, Honda will aim to achieve a return on sales (ROS) of 7%, which has been Honda’s FY2026 company-wide management target, by steadily recovering its automobile unit sales volume.

<Actions to address semiconductor shortage>
Concerning the ongoing shortage of semiconductors, Honda has been taking various actions to deliver products to its customers as soon as possible by implementing measures from both short-term and medium- to long-term perspectives.

1) Short-term measures:
In addition to further strengthening relationships with suppliers, Honda is taking various measures including dual-sourcing of key parts and the development of alternative parts.
2) Medium- to long-term measures:
While enhancing its risk-sensing measures, Honda has been building cooperative relationships and enhancing collaboration with semiconductor manufacturers, including the strategic collaboration with TSMC, through which Honda strives to ensure stable procurement of semiconductors.

3. Direction of Electrification Business

<Motorcycle business>
Honda plans to introduce 10 or more electric motorcycle models globally by 2025 and aims to increase annual sales of electric models to 3.5 million units, equivalent to approximately 15% of total unit sales, as of 2030.

Honda will launch the EM1 e: electric scooter equipped with a Honda Mobile Power Pack e: swappable battery in Japan, Europe and Indonesia before the end of 2023.
Envisioning the future business environment, market uses and technological advancements, Honda is exploring a range of future models including those equipped with a power source other than swappable batteries.

<Automobile business>
Honda has set a goal to increase the ratio of EV and FCEV sales to 100% globally by 2040. To this end, Honda is planning to produce more than 2 million EVs annually by 2030

Plans for the introduction of EV models are as follows.

North America:
– In 2024, the Honda Prologue and Acura ZDX, currently being codeveloped with General Motors (GM), will go on sale.
– In 2025, a mid- to large-size EV model which adopts the new E&E architecture based on Honda’s original dedicated EV platform will go on sale.

– In early 2024, e:NS2 and e:NP2 will go on sale.
– Before the end of 2024, mass production models based on the e:N SUV xu concept model will go on sale. The e:N SUV xu concept model was unveiled at Auto Shanghai this month.
– By 2027, Honda will introduce a total of 10 new EV models, including three models mentioned above.
– By 2035, Honda will strive to make EVs 100% of its automobile sales in China, ahead of other regions.

– In the first half of 2024, a N-VAN-based commercial-use mini-EV model will go on sales.
– In 2025, an EV model based on the N-ONE will go on sale.
– In 2026, two small-size EV models, including a SUV type, will go on sale.

Keeping pace with the enhancement of its EV lineup, Honda will begin offering vehicle charging services. For home recharging, based on the Honda SmartCharge, an EV charging service currently available in North America, Honda is planning to roll out energy business that utilizes the power supply capability of EVs. For public charging, Honda will work toward the establishment of an EV charging services environment for its customers in collaboration with providers of convenient and reliable charging networks.

4. Initiatives toward Steady Progress in Electrification
To ensure steady progress in electrification, Honda will entered into various strategic partnerships in areas ranging from procurement to resource circulation of batteries and battery resources, and is building a strong value chain with Honda as a hub to establish a sustainable business foundation.

4-1. Battery procurement and development

1) Now and for the current time period:
In each region, Honda has been strengthening its external partnerships in the area of liquid lithium-ion batteries and is now on track to have good prospects for stable procurement of the amount of batteries Honda will need on a global basis.

North America:
Procurement of Ultium batteries from GM and establishment of a battery production joint venture with LG Energy Solution (LGES)

Strengthened collaboration with Contemporary Amperex Technology Co., Limited (CATL)

Procurement of batteries for the N-VAN-based commercial-use mini-EV model from Envision AESC

2) From the second half of the 2020s:
In addition to the advancement of liquid lithium-ion batteries, Honda will develop and introduce next-generation batteries such as semi-solid-state and all-solid-state batteries.

Honda and GS Yuasa International Ltd. (GS Yuasa) will collaborate to develop high-capacity, high-output liquid lithium-ion batteries for EV use.

Honda will begin operation of a demonstration line for the production of all-solid-state batteries in 2024, aiming to adopt its all-solid-state batteries to models to be introduced to market in the second half of the 2020s.

Honda invests in and is jointly developing semi-solid-state batteries (lithium-metal secondary batteries) with SES AI Corporation (SES), an EV battery research and development company.

4-2. Battery resource procurement and resource circulation
In the areas of battery resource procurement and resource circulation, Honda will secure its competitive advantages from a long-term perspective by strengthening initiatives through collaboration with various partners.

1) Resource procurement:
By leveraging a strategic partnership with Hanwa Co., Ltd., Honda will ensure stable procurement in the medium to long term, of essential metals such as nickel, cobalt and lithium.

2) Resource circulation:
Honda will stabilize its material procurement and strive to achieve “zero environmental impact” by proactively utilizing recycled resources through strong partnerships with resource recycling businesses, including collaboration with Ascend Elements, Inc. and Cirba Solutions, and a comprehensive partnership with POSCO Holdings Inc.

4-3. Strengthening EV production system and capability
Preparing for the upcoming start of full-fledged EV production, Honda will re-tool three existing Honda plants in Ohio, in the U.S. (two auto plants, the Marysville Auto Plant and East Liberty Auto Plant, and one automobile powertrain plant, the Anna Engine Plant) to establish highly-efficient and highly-flexible production lines and position these plants as Honda’s EV Hub for production in North America.

Moreover, through the establishment of CO2 reduction technologies and the use of 100% clean energy through the utilization of renewable and other energy sources, Honda will make its Automobile Plant of Saitama Factory in Japan Honda’s first carbon neutral plant in FY 2026 (fiscal year ending March 31, 2026).

Furthermore, Honda has begun working on the global reform of its production system with an eye toward the production of EV models scheduled to go on sale in the second half of the 2020s. The reform initiatives will focus on the following three perspectives.

Establishment of production lines which pursue automation and application of intelligent technologies in consideration of future changes in the workforce.

Establishment of highly efficient factories and supply chains which will enable a shift to EVs in a short period of time.

Shift to production processes which reduce CO2 emissions to the utmost limit and assume the resource circulation approach.

5. Strengthening of Software-related Areas
Based on the concept of “software-defined mobility,” in which software defines the value of hardware and services, Honda will accelerate software development.

Specifically, Honda is further advancing its E&E architecture and developing Honda’s original vehicle OS with the aim of adopting them starting from the mid- to large-size EVs to be launched in North America in 2025. Based on this vehicle OS, Honda will continue advancing its in-vehicle software to enable the continuous advancement of vehicle functions and services for customers even after the vehicle is purchased.

Moreover, working toward insourcing of software development in the areas of the vehicle OS, automated driving/advanced driver-assistance system (AD/ADAS) and connected vehicles and services, Honda will double the originally planned number of new hires and also further strengthen recruiting of high-level software development experts. Moreover, Honda will accelerate collaboration with partner companies which have strengths in software development, including KPIT Technologies Limited (KPIT). Through such collaboration, Honda and partners will bring together their respective strengths, namely Honda’s control and safety technologies and partners’ software development capabilities, and strive to realize new value that can be created through software.

In the areas of the user experience (UX) and digital services, Honda will continue strengthening development, mainly in North America, by taking various initiatives including the establishment of a new Global User Experience Officer position and proactive approach in recruiting digital experts.

6. Strengthening of Alliance with GM
Honda will further strengthen its alliance with GM. In addition to codeveloping a series of affordable electric vehicles which will go on sale in 2027 and beyond, the two companies will continue exploring a broad range of collaboration which will combine the respective strengths of the two companies and increase competitiveness in the areas of core electrification components.

7. Initiatives toward New Value Creation
Toward new value creation, Honda will make steady progress by constantly securing an annual budget at the level of 100 billion yen for research into next-generation mobility as well as for fundamental research activities, mainly in the areas of carbon neutrality technologies related to the five key factors Honda is focused on, such as the application of intelligence technologies, advancement of batteries, utilization of hydrogen and sustainable materials.

Moreover, in order to realize new value creation more speedily, Honda has allocated an annual investment budget of 10 billion yen and been proactively pursuing open innovation with startups. To date, Honda has invested in startups which have cutting-edge technologies that are highly likely to be needed in the future, such as AI, synthetic fuels, battery recycling and nuclear fusion power generation technologies.

Furthermore, in order to further strengthen its open innovation functions through close coordination with corporate strategies, Honda has newly established Honda Innovations Co., Ltd. in Japan this month, which will serve as the global head office function for Honda’s open innovation activities.

8. Redefining the Honda Global Brand Slogan
For Honda to continue to be viewed as a company society wants to exist in the midst of the period of the “once in a hundred years transformation” of the industry, Honda management determined that the company needs to re-clarify the “raison d’etre” of Honda, what the company really wants to achieve, as well as the “value proposition” of Honda, which exists beyond its business strategies, such as electrification and digitalization. Based on this realization, Honda redefined the existing Honda Global Brand Slogan – The Power of Dreams – by adding a new tagline and three key words.

– How we move you.
The creation of mobility through the dreams of each and every Honda associate will “move” people physically and also “move” people’s hearts.

– Create, Transcend, Augment
Driven by dreams and the intrinsic motivation of each and every person working at Honda, the company will create “the mobility Honda dreams of” to embody the essential value of all mobility products and services – to enable people to transcend the constraints of time and place, and to augment their every possibility. Through the creation of the mobility Honda dreams of, Honda will become “The Power of Dreams” of more and more people. That is how we will move people and society forward.

For more information, visit https://global.honda/newsroom/news/2023/c230426eng.html.

Canada – Consultation Summary: Notice of Intent Enhanced Transparency of the Pesticide Regulatory Process, NOI2022-01

Health Canada’s Pest Management Regulatory Agency

17 March 2023

Table of Contents

The consultation
Summary of comments received

On 4 August 2021, the Ministers of Health, Agriculture and Agri-Food and Environment and Climate Change announced that the Government of Canada would be investing $42 million in Health Canada’s Pest Management Regulatory Agency (PMRA) to further strengthen its human and environmental health and safety oversight and protection, and improve transparency of the pesticide review process. Several strategies are in process of being implemented by the PMRA to make more information available to the public and enhance transparency of the pesticide regulatory process.

The consultation
On 25 October 2022, the PMRA published a Notice of Intent and initiated a 30-day consultation on a proposal for enhanced transparency of the pesticide regulatory process (NOI2022-01). The proposal outlined PMRA’s intent to disclose the names of applicants and registrants once the review process is initiated, for those pre- and post-market reviews described in Appendix I. This would consist of the name of any person, including an individual, who is an applicant or registrant and would appear in:

The electronic public registry (via the Pesticide Product Information Database (PPID);
Consultation documents posted on the Pesticides section of the Canada.ca website (in other words, Proposed Registration Decision (PRD) and Proposed Maximum Residue Limit (PMRL)); and subsequently
Registration Decision documents.

In total, eleven responses were received. Nine responses were from industry stakeholders and two from non-governmental organizations (NGOs). Of note, comments received that went beyond what the proposal set out in the consultation document were not considered for the purpose of this proposal.

Summary of comments received

Comments from NGOs and some industry stakeholders confirmed support for PMRA’s proposal.

Overall, there is strong support for this PMRA initiative to enhance the transparency of the pesticide regulatory process that will improve confidence in the regulatory system. There is agreement that this initiative aligns with the Government of Canada’s commitment of August 2021. There is support to align with similar transparency practices implemented by other branches of Health Canada and international pesticide regulators such as the United States Environmental Protection Agency (USEPA) and the Australian Pesticides and Veterinary Medicines Authority (APVMA) for applications pending a regulatory decision. Disclosing regulatory ownership of review activities requested of the PMRA was acknowledged as key to transparency for the public.

Some industry stakeholders requested additional clarifications on who is considered to be the applicant in the context of this proposal and whether there is a distinction between applicant and registrant.

PMRA response:

The term “applicant” is not defined in the Pest Control Products Act or the Pest Control Product Regulations, whereas the term “registrant’’ is defined as “a person in whose name a pest control product is registered.” However, in the Act and Regulations, the term “applicant” is used to mean a person who makes an application:

to register or amend the registration of a pest control product under section 7 of the Pest Control Products Act,
to have an MRL specified for an unregistered active ingredient or an unregistered use under section 10 of the Pest Control Products Act, and
to renew a registered pest control product under section 16 of the Pest Control Product Regulations.

The “applicant’s name” refers to the name of the proposed or current registrant as identified in the Application Form for New or Amended Registration (form 6005), Box 3 Registrant Name (full legal name, no abbreviations). The registrant’s name is the intended or current registrant of the product, in whose name the Certificate of Registration would be issued.

The applicant’s or registrant’s name, whether the name of an individual, a company or another organization, will be made publicly available in the PPID, in Consultation Documents posted on Pesticides section of Canada.ca (in other words, PRD and PMRL, and subsequently in Registration Decision (RD) documents.

Some industry stakeholders commented that the PMRA’s proposal may impact the protection of the intellectual property of Canadian innovators and affect commercial interests, resulting in a competitive disadvantage.

PMRA response:

This proposal is consistent with the approach taken by Health Canada in respect of regulated products under the Food and Drugs Act. Since the implementation of the disclosure of applicant’s or registrant’s name for drug applications in 2015, stakeholders have not raised any concerns about a negative impact on their commercial interests. The PMRA does not expect any negative impact on commercial interests of disclosure of the names of applicants or registrants for pest control product applications. While it may be possible for the PMRA to receive an application for a new active ingredient or new innovative device for which there is a patent application pending, it is expected that this would happen on rare occasions. This type of situation could be managed on a case-by-case basis when an applicant or registrant identifies within their application cover letter that a patent application is pending, including the information required for verification. Additionally, while the PMRA proposes to disclose the applicant’s or registrant’s name, it will continue to maintain confidentiality of the product name while the application is under review, and when an application is withdrawn including instances where applications are rejected prior to making it to a full science review assessment. These considerations are expected to support the protection of intellectual property of Canadian innovators and allow the applicant to pursue its innovation efforts at a later date, as needed.

Some industry stakeholders questioned the transparency benefits and objective of disclosing the applicant’s or registrant’s name.

PMRA response:

In support of the Government of Canada’s initiatives towards Open Government as well as its commitment to enhanced transparency of the pesticide review process, additional information is being released in the PPID.  Currently the following information is released in the Public Registry for open applications for a variety of regulatory activities:

Application number and date received
Active ingredient(s)
Purpose (i.e., new, amendment, minor use)
Category of application (i.e., A, B, C, L, etc.)
Product type (i.e., insecticide, material preservative)
Marketing class (i.e., technical, commercial, domestic)

The addition of the applicant’s or registrant’s name will provide additional information about the application that has been filed to further support meaningful public participation in the regulatory process. PMRA recognizes that the transparency and openness of its work is critical in strengthening trust in the regulatory decisions. Disclosing the applicant’s or registrant’s name in the public registry is a first step in revisiting the types of information and data that we make available.

Some industry stakeholders commented that the PMRA’s proposal may lead to brand stigmatization, specifically when an applicant’s or registrant’s name is disclosed in relation to a negative outcome.

PMRA Response:

Following a review of the information and comments provided during consultation, the PMRA conducted an analysis of additional considerations. This analysis, which included the review of historical pest control product applications, confirmed that the applicant’s or registrant’s name has never been designated as confidential business information (CBI). This supports PMRA’s view that an applicant’s or registrant’s identity is unlikely to be information that meets the definition of CBI under the Pest Control Products Act, even when disclosed in association with the information that is already disclosed during the application review stage.

As described above, the PMRA will continue to maintain confidentiality of the product name, while the application is under review, and in certain instances of a negative outcome. This is expected to minimize brand stigmatization and limit prejudice in the marketplace, allowing the applicant to pursue re-application for their new or amended pest control product at a later date, as needed. It is PMRA’s position that the disclosure of the applicant’s or registrant’s name in relation to a negative outcome is not expected to lead to brand stigmatization or prejudice competitive position in the marketplace.

Following consideration of the comments received from stakeholders, as of 1 April 2023, the PMRA will be implementing the disclosure of the names of applicants, after administrative screening of a complete application package, once the application enters the review stream, for a variety of regulatory activities.

This information will be included in:

The Register (via the PPID) for applicable applications received on or after 1 April 2023; and
Consultation (in other words, PRD, PMRL) and Registration Decision documents posted on the Pesticides section of Canada.ca for applicable applications received on or after 1 April 2023.

Appendix I Types of regulatory activities released in the pesticide product information database
Category A – New Active Ingredients, Major New Uses, Maximum Residue Limits on unregistered active ingredients.

Category B – New or Amendments to Existing Registrations plus Emergency Registrations

Category C – Precedent Based Registrations and Amendments plus Minor Use Registrations

Category D – Importation for Manufacturing and Export Program (IMEP), User Requested Minor Use Label Expansion (URMULE), Master Copies, Private Labels, Renewals, Discontinuations

Category H – Notices of Objection and Review Panels

Category L – Data Protection Applications and Registrations

Category N and R – Re-Evaluations and Special Reviews

Japan – Summary of Briefing on Honda Motorcycle Business

Honda aims to realize carbon neutrality for all products and corporate activities Honda is involved in by 2050. Today, Honda held a press briefing regarding its motorcycle business initiatives, presented by Kohei Takeuchi (Director, Executive Vice President and Representative Executive Officer) and Yoshishige Nomura (Managing Officer).

A summary of the briefing follows:

1. Approach toward carbon neutrality of motorcycle products

To accommodate a variety of uses and needs of customers around the world, Honda offers a wide range of motorcycle products, from small commuter models to large fun models, which are used globally in both emerging and advanced countries. In emerging nations, especially, there is high demand for motorcycles, mainly commuter models, as a lifeline of people in their everyday life; however, popularization of electric models faces challenges such as heavier vehicle weight and higher prices. Also, demand for electric models depends largely on government incentives, regulations and availability of charging infrastructure in each respective market.

Considering these circumstances, Honda will accelerate the electrification of motorcycles as the primary focus of environmental strategies for motorcycle business, while also continuing to advance ICE, aiming to achieve carbon neutrality for all of its motorcycle products during the 2040s. Moreover, Honda will continue to lead the industry at the forefront of its environmental initiatives.

<Continued Initiatives to Advance ICE>
In order to realize carbon neutrality while accommodating the wide range of customer needs and usage environments unique to motorcycles, Honda continues its initiatives to reduce CO2 emissions from ICE models, while also developing models compatible with carbon neutral fuels such as gasoline-ethanol blends. To be more specific, in addition to Brazil where flex-fuel (E100)*1 motorcycle models are already available, Honda plans to introduce flex-fuel models in India, as well, one of the major motorcycle markets. The plan is to first introduce flex-fuel (E20) *1 models beginning in 2023, and flex-fuel (E100) models in 2025.

2. Electrification Initiatives

<Introducing electric motorcycle models to meet wide-ranging customer needs>
Anticipating market expansion, Honda will introduce electric motorcycles that accommodate a wide range of customer needs. Commuter models and fun models combined, Honda will introduce more than 10 new electric motorcycle models by 2025, with an aim to reach annual electric motorcycle sales of 1 million units within the next five years, and 3.5 million units (approximately 15% of total sales) as of 2030.

Details of product launch plans follow:

(1) Commuter EVs

As businesses are becoming more environmentally conscious, demand for business-use electric motorcycle models has been on the rise in recent years. To fulfill such demand, Honda has been offering the Honda e: Business Bike series models and accelerating the global launch of business-use electric motorcycles. In addition to providing a Honda e: Business Bike series model to Japan Post and Vietnam Post Corporation*2 for mail delivery, Honda is currently conducting joint trials with Thailand Post Company Limited*3, and planning to begin production and sales of the Benly e: in Thailand before the end of this month. These Honda e: Business Bike series models are equipped with Honda Mobile Power Pack (MPP) swappable batteries, which are well-suited to business use such as the delivery of small packages and resolve issues of range and charging time, which are key challenges that need to be addressed to realize widespread use of electric motorcycles.

For personal use, Honda plans to introduce two commuter EV models between 2024 and 2025 across Asia, Europe and Japan. Envisioning the future market environment, uses and technological advancements, Honda is exploring a range of future personal-use models including ones equipped with a power source besides swappable batteries.

(2) Commuter EMs*4 / EBs*5

Currently, EMs and EBs account for more than 90% of industry-wide global electric motorcycle unit sales (approximately 50 million units). In China, the world’s largest electric motorcycle market, EMs / EBs are widely adopted as a convenient form of everyday mobility, and Honda has been offering such products by leveraging its local supplier infrastructure and development / manufacturing operations. With the expectation that demand for EMs / EBs will be expanding globally, Honda plans to introduce a total of five compact and affordable EM and EB models between now and 2024 across Asia, Europe and Japan, in addition to China.

(3) FUN EVs

In addition to commuter EVs, Honda is actively developing electrified models in the “FUN” category. Based on its FUN EV platform currently under development, Honda plans to introduce a total of three large-size FUN EV models across Japan, the U.S and Europe between 2024 and 2025. Honda will also introduce Kids Fun EV model, designed to pass on the joy of riding to the next generation.

<High-efficiency “Monozukuri” that enables expansion of the electric model lineup and sales>
Based on its competitive “Monozukuri” (art of making things) know-how, amassed through the development and application of platforms for ICE-powered models, Honda will develop and apply electric motorcycle platforms that combine the three core components for electric vehicles “the battery, PCU and motor” with the motorcycle body. By fulfilling customer needs with highly efficient Monozukuri, Honda will continue to offer the joy of mobility with affordably-priced electric motorcycle models.

Regarding the battery, a core component of electric vehicles, Honda aims to equip its electric motorcycle models with an all-solid-state battery Honda is currently developing by making active use of its own resources.

3. Smoother and Smarter Use of Electric Motorcycles

<Initiatives to enhance charging infrastructure and standardize batteries>
Enhancement of charging infrastructure and standardization of battery specifications are vital for the widespread adoption of electric motorcycles. As part of the enhancement of charging infrastructure, Honda is working toward popularization of battery sharing.

(1) Popularization of battery sharing
Honda has established a joint venture in Indonesia, one of the major motorcycle markets, to operate a battery sharing service utilizing MPPs and MPP-powered motorcycles. The JV is currently operating a battery sharing service in Bali.

In India, Honda is planning to begin its battery sharing service for electric tricycle taxis (so-called “rickshaws”) by the end of this year. Honda is also planning to expand its initiatives to popularize battery sharing to other Asian nations.

In Japan, in April of this year, ENEOS Holdings, Inc. and the four major Japanese motorcycle manufacturers*6 jointly incorporated Gachaco, Inc., which will provide a sharing service of standardized swappable batteries for electric motorcycles and develop infrastructure for this service. The company plans to begin its motorcycle battery sharing service this fall.

(2) Standardization of batteries
In Japan, four major Japanese motorcycle manufacturers have agreed on common specifications for swappable batteries based on the JASO TP21003*7 guideline.
Honda is working toward the standardization of swappable batteries while participating in a battery consortium in Europe*8 and working with a partner company in India.

<Strengthening of the areas of software technologies>
To increase the added value of its electric motorcycles, Honda is aiming to transform its business from a focus on non-recurring hardware (product) sales business to a recurring business model combining hardware and software.

In the area of software development, Honda is working with its software subsidiary, Drivemode*9, to enhance new value creation for its electric motorcycle products in the connected realm. Starting with the commuter EV model scheduled to go on sale in 2024, Honda will offer user experience (UX) features that continuously enrich the quality of riding through connectivity, such as offering optimal route options that take into consideration remaining range, charging spot notification, safe riding coaching and after-sales service support.

Looking ahead, Honda will work toward the establishment of a connected platform where greater value will be generated not only by connecting its motorcycles, but by linking a wide range of Honda products and realizing connectivity beyond their product domains.

*1 Gasoline-ethanol blend fuel. Various blend rates are available, from 100% gasoline to 100% ethanol. E100 is 100% ethanol, while E20 is 20% ethanol.
*2 Vietnamese postal service
*3 Thailand postal service
*4 Electric Moped category. Maximum speed: 25km/h – 50km/h
*5 Electric Bicycle category, not including electric-assisted bicycles. Maximum speed: 25km/h or lower.
*6 Honda, Kawasaki Motors, Ltd., Suzuki Motor Corporation and Yamaha Motor Co., Ltd.
*7 The Society of Automotive Engineers of Japan, Inc. Organization (JASO) technical paper TP21003, the “Guideline For Swappable Batteries Of Electric Two Wheel Vehicles”
*8 Swappable Batteries Motorcycle Consortium (SBMC) established for the purpose of achieving widespread adoption of electric motorcycles and other small-sized electric mobility products.
*9 A developer of software that transforms UX for mobility. Drivemode builds smarter, safer, connected driving technology for everyone on the road.

Sectors: Automotive, Motorsports

Copyright ©2022 JCN Newswire. All rights reserved. A division of Japan Corporate News Network.

Japan – Summary of Honda Briefing on Automobile Electrification Business

Honda Motor Co., Ltd. today held a press briefing on its initiatives in automobile electrification business that included participation of the following Honda executives:

– Toshihiro Mibe, Director, President and Representative Executive Officer
– Kohei Takeuchi, Director, Executive Vice President and Representative Executive Officer
– Shinji Aoyama, Senior Managing Executive Officer

A summary of the briefing follows:

1. Honda initiative for electrification

Honda is striving to be a company which serves as a source of “power” that supports people around the world who are trying to do things based on their own initiative and that helps people expand their own potential. To this end, Honda strives to realize “the joy and freedom of mobility” by seeking a “zero environmental footprint.”

Solidifying existing businesses
Over the past several years, Honda has been pursuing various initiatives toward the direction to “solidify existing businesses” and to “prepare for new growth” and these initiatives have begun showing positive results in the areas of products, businesses and new technologies.

– The structure of Honda automobile business has made steady improvement. As of today, the total number of variations at the trim and option level for global models has been reduced to less than one-half of the number in 2018 (Target: a reduction to one-third by 2025).
– As for cost associated with global automobile production, Honda is on track to achieve its 10% reduction target, compared to the cost recorded in 2018.

Honda will continue to accelerate its efforts to generate resources by solidifying existing businesses and invest such resources in electrification and the preparation for new growth.

Unique Honda approach
As the world’s largest power unit manufacturer with annual sales of approximately 30 million units of mobility products including motorcycles, automobiles, power products, outboard motors and aircraft, we aim to realize carbon neutrality for all products and corporate activities Honda is involved in by 2050, striving to eliminate carbon emissions from power sources of a wide variety of products. To this end, Honda believes that a multifaceted and multidimensional approach is needed, not a mere replacing of engines with batteries.

Including the utilization of swappable batteries and hydrogen as well as electrification of automobiles, Honda will offer a variety of solutions for all of its mobility products according to how its customers use the products in various countries and regions.

Furthermore, with the connected platform, which connects all these elements, Honda will enhance the convenience and efficiency of society as a whole.

Organizational changes made to strengthen electrification business
In the past, Honda divided its organization by products, namely motorcycle, automobile and power products. However, starting this fiscal year, technology areas which will become the core of the future competitiveness of Honda have been moved from their respective product-based organizations and combined under the newly created Business Development Operations. Such core areas are: electrified products and services, battery, energy, Mobile Power Pack, hydrogen and software/connected technologies that connect all core areas. With this change, Honda will accelerate the speed at which it can move and enhance the “cross-domain” synergy effect among Honda products.

2. Initiatives for automobile electrification business

Battery procurement strategy
The key challenge in the EV era is the global procurement of batteries. Honda has two basic approaches for its battery procurement strategy.

1) Now and for the time being:
Honda will ensure stable procurement of liquid lithium-ion batteries in each region by strengthening the external partnership.

– North America:
Honda will procure Ultium batteries from GM. Separately, aside from GM, Honda is exploring the possibility of creating a joint venture company for battery production.
– China:
Honda will further strengthen our collaboration with CATL.
– Japan:
Honda will procure batteries for mini-EVs from Envision AESC.

2) From the second half of the 2020s:
Honda will further accelerate its independent research and development of next-generation batteries. For the all-solid-state batteries it currently has under development, Honda decided to build a demonstration line, investing approximately 43 billion yen, with a goal to make it operational in Spring 2024. Honda aims to adopt its next-generation batteries to models to be introduced to the market in the second half of the 2020s.

Introduction of EVs
Specific plans for the market introduction of EV models are as follows.

1) From now through the second half of the 2020s:
Honda will introduce products tailored to the market characteristics of each region.

– North America: In 2024, Honda will introduce two mid- to large-size EV models currently being developed jointly with GM. (Honda brand: All-new Prologue SUV, Acura brand: an EV SUV model.)
– China: Honda will introduce a total of 10 new EV models by 2027.
– Japan: In early 2024, Honda will first introduce a commercial-use mini-EV model at the 1-million-yen price range. Then, Honda is planning to make the timely introduction of personal-use mini-EVs and EV SUVs.

2) After the second half of the 2020s:
Assuming it will become the time of the popularization of EVs, Honda will begin introducing the best EVs from a global perspective.

– In 2026, Honda will begin adopting Honda e: Architecture, an EV platform that combines the hardware platform and software platform.
– Through the alliance with GM, Honda is planning to introduce affordable EVs in 2027, with a cost and range that will be as competitive as gasoline-powered vehicles, starting from North America.

Through these initiatives Honda is planning to launch 30 EV models globally by 2030, with a full lineup from commercial-use mini-EVs to flagship-class models, and Honda is planning for production volume of more than 2 million units annually.

EV production
– As for EV production operations, in China, Honda is planning to build a dedicated EV plant in Guangzhou as well as Wuhan.
– Honda is planning for a dedicated EV production line also in North America.

3. Strengthening of the areas of connected / software technologies

Honda is striving to offer greater value not only with each of our products, but when various Honda products become linked and realize a connectivity beyond their product domains.

The key to achieve such connectivity is the technologies and frameworks, where Honda positions its electrified products as “terminals” and connects energy and information stored in each product with its users and society. Therefore, Honda will work on the establishment of the cross-domain connected platform, which will create new value for its customers.

In the areas of electrification technologies, including batteries, as well as software and connected technologies, for the acceleration of its development efforts, Honda will strive for a significant enhancement of development capabilities, which will include the strengthening of its human resource recruiting from outside Honda.

Also, in these areas, Honda will proactively pursue inter-industry collaboration and alliances, as well as investments in startups.

4. Financial strategies that support the transformation of Honda businesses

While making progress in electrification, Honda will shift focus from non-recurring hardware sales business and strive to transform the portfolio of Honda businesses by combining hardware and software to expand connections with its customers and the range of its businesses. Also, after 2030, Honda will strengthen its combined solution business and also businesses in new areas. To realize such transformation of the business portfolio, Honda has been putting effort into solidifying its existing businesses.

Improvement of the earnings structure
In addition to its steady efforts to solidify existing businesses, Honda strived to reduce costs from all directions while facing a difficult business environment due to issues such as the pandemic and semiconductor shortage. As a result, the business structure has been improving, and Honda is confident that its continuous efforts will enable an adequate achievement of the return on sales (ROS) of more than 7%, which had been Honda’s mid- to long-term target. Also, the net cash balance was 1.9 trillion yen (at the end of the third quarter ended Dec. 31, 2021), maintaining a healthy level.

Resource investments over the next 10 years and utilization of external funding

– Honda will budget approximately 8 trillion yen for its research and development expenses. Of all R&D areas, Honda is planning to invest approximately 5 trillion yen in the areas of electrification and software (Approx. 3.5 trillion yen for R&D expenses and approx. 1.5 trillion yen for investments).
– For the preparation of new growth, including new technology areas and resource circulation, Honda will invest approximately 1 trillion yen over the next 10 years.
– Honda will be active in investing in startups with high-potential advanced technologies and business models at a scale of 10 billion yen per year, which will expand the range of Honda technologies and businesses.
– Based on its policy to utilize external funding methods on an as-needed basis, Honda issued Green Bonds totaling US$2.75 billion in March of this year. By allocating the proceeds from these Green Bonds to the development and production of zero-emission vehicles such as EVs and FCVs, Honda will further accelerate our initiatives toward the realization of a society that aims for zero environmental impact.

5. Sports models

While taking on challenges toward carbon neutrality and electrification, Honda always has a passion to offer FUN for its customers. The “joy of driving” will be passed on to our models even in the era of electrification, and Honda will globally introduce two sports models, a specialty and a flagship model, which will embody Honda’s universal sports mindset and distinctive characteristics.

For more information, visit https://global.honda/newsroom/news/2022/c220412eng.html.

Sectors: Automotive

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