At a recent Honda annual shareholder meeting, CEO Toshihiro Mibe revealed that the talks with Nissan never really ended.
Honda is going through something that they’ve never gone through before. At a recent annual shareholder meeting, the CEO of Honda Motor, Toshihiro Mibe began by apologising for the company’s first loss in history. He said: “I would like to express my deepest apologies to our shareholders for the significant concern and inconvenience caused by the net loss recorded in the previous fiscal year’s financial results.”
He went on to explain some of this decisions that resulted in the loss, namely, the axing of its big plans in the electric vehicle space. Not only did Honda cancel their EV plans on the eve of production, but they reportedly had to compensate vendors for their costs in the project as well, leading to US$9 billion in restructuring costs. The reason for the last minute cancellation was that Honda realised that letting the cars go into production would only lead to many years of additional losses. Why?
Well, Honda looked at the demand for EVs in the USA and realised that it just wasn’t there, especially under the current government administration that has cut many pre-existing EV federal EV tax incentives. If Honda had gone through with their next generation EV rollout, they would have to spend even more money incentivising dealers to get cars off the lot. There wasn’t any comment on the situation in China, but we speculate that Honda’s 0 Series EVs would not be particularly competitive there either.
The more interesting thing to come out of the annual shareholder’s meeting was the CEO’s mention of Nissan. Apparently, the talks between the two Japanese automakers aren’t dead. In fact, Mibe said that there’s a joint venture in talks and those talks are quite far along with more details expected soon.
This couldn’t come sooner for both Nissan and Honda as both of these Japanese automotive giants are facing intense financial strain amidst falling market share in China and tougher market conditions throughout the world. It’s still not clear what this Joint Venture will entail, but we’ll hear more soon. It may involve Honda using Nissan’s platforms and EV tech in markets where they are weaker.
