Honda and GM have given up on their plan to co-create affordable EVs

The two companies planned to release compact EV crossovers costing less than $30,000 by 2027.

Issei Kato / reuters

Honda and GM are abandoning their plan to develop a line of affordable electric vehicles together. Under the program, which was announced in April 2022, the two had committed to building compact crossover EVs that would start at less than GM’s upcoming $30,000 electric Chevrolet Equinox. The first models were expected to start releasing in 2027.

Toshihiro Mibe, CEO of Honda, confirmed the project’s cancellation in an interview with Bloomberg, saying “we decided that this would be difficult as a business, so at the moment we are ending the development of an affordable EV.” Both companies will separately continue exploring options to bring down EV costs, Mibe said.

The decision comes amid industry wide EV production slowdowns and an ongoing United Auto Workers strike, which has GM at its center. Just this week, GM announced it would be delaying the production of EVs that use its Ultium battery pack, including the Equinox, Silverado and GMC Sierra EVs. As part of the now-scrapped affordable EV program with Honda, the companies intended to develop Ultium-based small crossover SUVs to compete with Tesla.

It was just one of several projects Honda and GM have been working on together, and it doesn’t seem its dissolution will have any effect on the others. The companies a few days ago announced they’ll be working with Cruise to launch a driverless ride-hailing service in Japan in 2026.