AutoBeta(AutoBeta.net)09/07 Report--

Honda China announced that Honda Scientific Research Industry (China) Investment Co., Ltd. (hereinafter referred to as: Honda China), Dongfeng Automobile Group Co., Ltd. (hereinafter referred to as: Dongfeng Automobile Group) and Guangzhou Automobile Group Co., Ltd. (hereinafter referred to as: GAC GROUP) signed an agreement on August 31, 2022, plans to jointly establish a power battery purchasing company at the end of this month.

According to information released by Honda China, the three-party joint venture is named "Zhongrui (Beijing) Trading Services Co., Ltd.", the English name is HDG (Beijing) Trading Service Co., Ltd, and the joint venture is located in Beijing. Specifically, the proportion of contributions made by Honda China, Dongfeng Automobile Group and GAC GROUP is 50%, 25% and 25%. The legal person and chairman of the company are executive director and Chinese minister of Honda Technology Research Industry Co., Ltd., general manager of Honda Technology Research Industry (China) Investment Co., Ltd., and general manager of Honda Technology Research Technology (China) Co., Ltd.

At the same time, Honda China has also signed a memorandum of strategic cooperation with Ningde era, the two sides will build a long-term stable power battery supply and demand system. However, this is not the first cooperation between the two sides. As early as 2020, Honda signed a cooperation agreement with Ningde era on power batteries for new energy vehicles, including joint development, stable supply, recycling and reuse of power batteries. Honda China said that after the establishment of the joint venture, it will provide a power battery supply and demand system for the new eRU N brand pure electric vehicle products.

At present, Honda has two joint ventures in China, Dongfeng Honda and Guangzhou Auto Honda. The two joint ventures purchase pure electric vehicle power batteries from the Ningde era. After the establishment of the new company, they will focus on purchasing power batteries from the Ningde era. Honda and Ningde will negotiate a more efficient logistics system in areas such as intensive production and battery recycling based on the Yichun plant under construction in the Ningde era to ensure a long-term and stable supply of power batteries, Honda said.

For Honda's joint venture to set up a battery purchasing company, the auto industry generally believes that this is the key to accelerating Honda's electric transformation. On October 13, 2021, Honda China unveiled its electrification strategy and unveiled a new pure electric car brand "eVV N" and a new intelligent and efficient pure electric architecture "eVV N Architecture". At the press conference, Honda China also brought two new pure electric vehicles, one from Dongfeng Honda e:NS1, the other from Guangzhou Auto Honda e:NP1, the two models are sister models, positioning small pure electric vehicles. Both of them are based on Honda EVR N Architecture F platform, with front motor layout, and the two models are basically the same in appearance and interior decoration.

Among them, Dongfeng Honda e:NS1 officially launched on April 26 this year, the new car positioning small pure electric SUV, a total of four models, the price range is 175000-218000 yuan. In terms of power, the new car offers two versions: e-version and e-dynamic version. The maximum power of e-version is 134kW, the pure electric mileage can reach 420km under CLTC condition, and the pure electric mileage of e-version can reach 510km under 150kW CLTC condition.

Another model, Guangzhou Auto Honda e:NP1 1, was officially launched on June 20 this year, with a total of four new models with a subsidised price range of 17.5-218000 yuan. In terms of power, the new car is equipped with two different power motors, namely, the low-power motor of the maximum power 134kW and the high-power motor of the maximum power 150kW, while the battery capacity adopts the ternary lithium battery with the capacity of 68.8kWh jointly developed by Honda and Ningde era, and the maximum mileage under CLTC conditions is 420km and 510km respectively.

Separately, Honda announced on Sept. 6 that it had established a partnership with South Korean trading company Hanwa to ensure a stable supply of basic metal materials such as nickel, cobalt and lithium in electric vehicle batteries. Honda had previously said it planned to spend about Y8,000bn on research and development over the next 10 years and on electrification and software to speed up the electrification process. Honda plans to launch 30 pure electric vehicles in the global market by 2030, with an annual production capacity of more than 2 million.

For the Chinese market, Honda China plans to launch 10 eROR N brand pure electric vehicles by 2027. With the launch of new electric vehicle products such as the eRV N series, all the new models launched by Honda in China after 2030 will be electric vehicles such as pure electric vehicles and hybrid vehicles, and will no longer put in new fuel vehicles. Meanwhile, GAC Honda and Dongfeng Honda will respectively build new factories for pure electric vehicles in order to facilitate the introduction of eRV N series products. Their respective new factories for pure electric vehicles will be put into production one after another from 2024, and the pure electric vehicles produced will not only supply the domestic market in China, but also be exported to overseas markets. On the dealer side, Honda will push about 1200 dealers in China to create sales areas dedicated to the EVOR N series, and plans to open EVOR N dealerships in major cities to sell only electric models. According to Honda, which previously disclosed plans to build special electric vehicle production plants in Guangzhou and Wuhan, China, it is reported that Guangzhou Auto Honda may take over Guangzhou's Guangzhou plant, while Dongfeng Honda will take over the Shenlong II plant.

On Sept. 5, Honda China released its latest sales figures for August. Data show that Honda sold 136530 terminal cars in China in August, up 148.9% from a year earlier, with cumulative sales of 949314 from January to August 2022. Among them, Guangzhou Auto Honda sold 68600 vehicles in August, with a cumulative sales of 488200 vehicles from January to August, while Dongfeng Honda sold 67900 vehicles in August and 461100 vehicles from January to August.

According to data from the China Automobile Association, from January to July this year, domestic sales of new energy vehicles were 3.194 million, an increase of 1.2 times over the same period last year, with a market share of 22.1%, showing a trend of rapid growth. With the rapid rise of the new energy vehicle market, besides Honda, Japanese car companies, including Toyota and Nissan, are also speeding up the electrified transformation of the Chinese market, in which Guangzhou Auto Toyota has laid out its bZ4X model, and the new car is positioned as an all-electric medium-sized SUV, based on Toyota's e-TNGA architecture; Dongfeng Nissan's new all-electric SUV Ariya opened a blind subscription on April 27th and is expected to be released this year. Separately, Nissan announced today that it has agreed to buy a majority stake in Vehicle Energy Japan, a Japanese power battery maker. According to reports, Vehicle Energy is jointly invested by Japanese electronics manufacturer Maxell and Japan Industrial Innovation Agency (INCJ) to develop, manufacture and sell lithium-ion batteries for hybrid vehicles. In addition, Nissan will acquire a stake held by INCJ, but so far Nissan has not provided details of the deal. If nothing happens, Vehicle Energy Japan will become a combined subsidiary of Nissan. In response to this cooperation, Nissan sources said: "with the electrification of the car, we will speed up the pace of ensuring battery stability." Nissan also said: "this investment will give Nissan a stable battery supply and help develop next-generation batteries that have a competitive advantage in terms of performance and cost."

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