Is Honda's $11B Canada EV Deal Worth It? Rival Ford Burns Up To $65,000 On Every Electric Car It Sells
Portfolio Pulse from Anthony Noto
Honda Motor Co Ltd (NYSE:HMC) is investing $11 billion in Ontario, Canada, for an EV value chain, including assembly and battery plants, following a $4.4 billion investment in a U.S. battery plant. This move contrasts with Ford Motor Co's reported losses of $36,000 to $65,000 per EV sold and GM's $1.7 billion loss in its EV business in 2023, while Tesla and Rivian also face challenges in profitability. Ford's CFO promises cost-cutting measures amid declining revenues and changing consumer preferences for cheaper EVs. Honda's project, starting production in 2028 with a 240,000 annual unit capacity, aims for an all-EV and fuel cell vehicle offering by 2040, expecting to create 1,000 jobs with government support.
April 26, 2024 | 3:14 pm
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NEGATIVE IMPACT
Ford faces significant losses per EV sold, with a reported range of $36,000 to $65,000, amid efforts to cut costs and adapt to changing consumer preferences for cheaper EVs.
Ford's reported losses per EV sold highlight the financial challenges in the EV market. Efforts to reduce costs and adapt to consumer preferences for cheaper EVs are critical, but the short-term impact on stock could be negative due to these financial pressures.
CONFIDENCE 80
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Honda's $11 billion investment in Canada for an EV value chain marks a significant commitment to the EV market, contrasting with competitors' financial struggles.
Honda's investment is a clear signal of its commitment to the EV market, potentially positioning it as a leader. Given the industry's current financial challenges, Honda's move could attract investor interest, especially with its long-term vision and government support.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100