Honda Bets Big on Hybrid Vehicles

With several territories across the world planning to phase out internal combustion engine cars in favor of zero-emission electric vehicles, most carmakers are hedging their bets on electric vehicles. Rising greenhouse gas emission levels coupled with climate change have underscored the need for clean, emission-free transportation.

Since EVs run on electricity and produce zero emissions at the tailpipe, they are a good replacement for fossil fuel vehicles. As such, automakers have invested billions of dollars in developing electric vehicles in the past couple of years and plan to spend billions more through the decade.

Japanese carmaker Honda has chosen to go a slightly different way. Rather than go all-in on battery electric vehicles (BEV), Honda is betting on hybrid cars. Unlike BEVs, which are solely powered by a rechargeable battery pack, hybrid cars have both an internal combustion engine and an electric motor.

Earlier last week, Honda announced that it would hedge its bet on hybrid vehicles that feature an electric-petrol system while it waits for public charging infrastructure to develop. Honda CEO Toshihiro Mibe says that rather than simply switching to zero-emission EVs, the automaker has to consider factors such as  green-energy penetration and living environments.

As it stands, electric vehicles aren’t 100% clean. The mining operations that provide minerals used to build EV batteries cause significant damage to the environment and have had numerous human rights issues. Furthermore, the electricity used to charge EV batteries is often generated by burning fossil fuels.

According to Mibe, Honda will focus on vehicles powered by a battery and a small combustion engine for the coming decade. He notes that the company will still phase out conventional combustion engines.

This announcement came soon after the Japanese automaker pledged to also invest $40 billion in electric cars over the next decade. Last week, the company announced that it would manufacture millions of affordable electric cars for the Chinese and North American markets in partnership with General Motors from 2027.

Regardless, you won’t be seeing plenty of fully electric Hondas on the road in the near future. Honda currently has only one electric model on the road and doesn’t have plans to release a new one onto the market any time soon. With automakers around the world racing to secure battery supplies and ramp up EV production, Honda has had trouble sourcing EV batteries.

Consequently, Honda will leverage General Motors’ Ultium batteries and may partner with a still-unnamed party to produce EVs in the North American market. Honda will source batteries for electric vans from Envision AESC in Japan and Contemporary Amperex Technology Co., Limited (CATL) in China.

As Honda looks to hybrids, other players, such as Kandi Technologies Group Inc. (NASDAQ: KNDI), have a different focus. The world awaits what will happen when all these efforts converge to revolutionize the auto industry.

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