Honda and Hitachi to Produce Electric Vehicles Together

Feb 08, 2017 10:54 AM EST | Joyce Vega

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Toyota Motors and Suzuki Motors are not the only ones that are forging a partnership that will help alleviate the costs of developing electric vehicles. Honda and Hitachi are forming a partnership of their own as well for the sake of technological development.

Fortune reported that Honda and Hitachi are joining forces to compete in the highly specialized green car segment, which is now very in demand. The venture will build motors that are going to be used in petrol hybrids, plug-in hybrids, and battery-electric cars. Tokyo-based Hitachi Automotive is established in 2009. It is a subsidiary of the Hitachi Ltd. The company first started selling motors for electric vehicles in 1999.

Hitachi Automotive Systems are a longtime supplier of components including engine and brake parts to Honda. The alliance between Nissan Motor and Renault are their bigger client, and they account for one-third of their annual sales. Other costumers include Toyota Motor, Ford Motor, and Volkswagen. On the other side, Honda will continue to make its own motors and keep production line in Japan.

Bloomberg reported that the joint venture is prompted by the expected demand for electric vehicles. It will also expand their product line while containing high development costs. It will also combine the advantages of both companies to advance the competitiveness of the motors from the joint venture. The new company will also sell it motors to other automakers other than Honda if there is demand for them. They plan to manufacture in Japan, U.S, and China.

According to Reuters, the venture will be established in July with an investment of 5 billion yen. It will be 51% owned by Hitachi Automotive Systems, and 49% held by Honda. The latest joint ventures by Japan's third-biggest automaker are part of its strategy for new-energy cars to comprise two-thirds of its vehicle line-up by 2030 from around 5 percent now.

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