To put that goal in perspective, Honda sold 10,000 EVs in China last year, a year in which local rival BYD more than tripled its sales of new energy vehicles — a category that includes EVs and other electrics — to 600,000 units.
Volkswagen, which owns the top passenger vehicle share in China, sold 70,000 EVs last year and aims to double that figure this year.
“If we don’t remain competitive in China where electrification is moving forward, we’ll be left behind globally,” said Katsushi Inoue, Honda’s chief officer for regional operations in China.
“We’ll change anew in all areas,” Inoue added. “The next five years will make or break Honda.”
Honda aims to sell 2 million vehicles overall at the end of the decade, which would best 2021’s sales figure by 30%. EVs would account for 40% of the fleet by that date while the other 60% would be hybrid vehicles.
The key to Honda’s ambitions will be the e:N series, Honda’s first EV in China bearing the company’s iconic “H” logo. Honda will roll out 10 models over the next five years, with the first being the e:NS1 and e:NP1 sport utility vehicles that will be released this spring.
Concept vehicles for the second e:N rollout will be put on display at the Beijing International Automotive Exhibition in April.
The e:N series features the Honda CONNECT onboard system, developed by the Japanese automaker and an affiliate of Chinese tech giant Neusoft. The system includes a driver-side display that can be divided into three sections to display a map, apps and air conditioning controls.
Honda CONNECT can also be voice controlled, and the system supports multiple Chinese dialects, such as Cantonese.
On the production front, Honda’s two Chinese joint ventures, Dongfeng Honda Automobile and Guangqi Honda Automobile will each receive a new EV plant. The facilities are due to go into operation in 2024 with an initial combined capacity of 240,000 units a year.
That capacity alone will not be enough to reach the 800,000-unit target but “future capacity expansion is certainly on the horizon”, said Inoue.
The new factories will also serve as export hubs, though the time frame and the destination regions for that operation have yet to be determined.
For EV batteries, Honda will work more closely with Contemporary Amperex Technology Co Ltd, or CATL, the world’s largest battery supplier, in which Honda holds a minority stake.
“We have secured guaranteed battery supply from CATL,” Inoue said. “Over the next five years (the supplies) will be stable.”
Honda has not publicised this year’s sales goals for China. Last year’s global semiconductor shortage affected Honda heavily, causing annual sales to shrink for the first time in three years.
“The impact will persist to some extent until the first half of this year,” Inoue said.
Last year, 3.52 million new energy vehicles were sold in China, up 160% from 2020. The government seeks to have new energy vehicles make up half of all auto sales in 2035 while the other half will be hybrids.
Automakers will be under pressure to electrify their fleets, which will inevitably lead to stiffer competition in the EV space.