Honda will change all two-wheelers sold worldwide to pure electric (EV) models by the mid-2040s. Kinz Nomura, managing executive director of the company's second-wheeler business, said that even if pure electrification causes an increase in battery costs, "sales operating profit margin will remain above 10% (as is currently)". Although Honda is the world's largest 2-wheeler manufacturer, Chinese companies are leading the way in electrification. Nikkei Shimbun (Chinese version: Nikkei Chinese website) interviewed Nomura Shinshu about Honda's future countermeasures.
Reporter: In terms of four-wheeler business, Honda plans to change all four-wheeler vehicles to pure electric vehicles and FCV (fuel cell vehicles) by 2040. How will two-wheelers promote electrification?
Kinz Nomura: To achieve carbon neutrality of the company's business activities by 2050, it is necessary to stop production of gasoline motorcycles in the mid-2040s. The shipments of electric two-wheelers will reach 1 million by 2026, which is equivalent to about 5% of the overall. Shipping volume will reach 3.5 million vehicles by 2030, equivalent to 15% of the overall, and the electrification speed will be increased after 2030.
Honda's pure electric motorcycle "BENLY e"
Reporter: The sales operating profit margin of the two-wheeler business has always remained above 10%, higher than Honda's overall level. If electrification leads to increased costs, profitability may worsen.
Kinz Nomura: Even if electrification is achieved, it will maintain an operating profit margin of more than 10%, which is the lowest goal. The goal for 2026 is to bring the shipment of electric two-wheelers to 1 million, which is a key point. Only after the scale reaches 1 million vehicles will the mass production effect be revealed. You can also use the efficient production technology and development experience accumulated on gasoline motorcycles to launch products with high price competitiveness.
At present, Honda will produce electric motorcycles with the same performance as gasoline motorcycles, the cost will be about 50% to 80%. The high price of batteries is an important reason. In order to reduce costs, the universalization of components with gasoline motorcycles will be further promoted.
Reporter: To reduce costs, it may be necessary to jointly purchase batteries with four-wheelers and make other parts by yourself.
Kinz Nomura: It is currently difficult to purchase batteries with four-wheelers. The shipment volume of electric two-wheelers is limited, and cylindrical battery units used for electronic products and other products are used. The pure electric four-wheeler is equipped with a square battery. In the short term, two-wheelers and four-wheelers may use different battery units separately. But if the new generation of high-energy density all-solid-state batteries currently under development can be practical in the second half of the 2020s, we also hope to use them on two-wheelers.
In addition to being self-made, power units such as motors are also promoting procurement from internal and external enterprises in the group, and striving to achieve a variety of options. The Indian government and the Indonesian government require the procurement of electric parts locally. We will optimize the procurement policy based on the country and region.
Reporter: What markets does Honda's two-wheeler business attach importance to?
Kinz Nomura: Our main sales targets are Southeast Asia and India. The Southeast Asia and India markets account for 2-3 of the total sales. The second is China, accounting for nearly 30%, and the remaining few percentage points are developed countries. We will eventually work on electric scooters and electric motorcycles . In China, the largest market, the market is large for low-power electric bicycles and "MOPET" equipped with both motors and pedals (Editor's Note: Similar to electric bicycles, driver's license is required in Japan. The term comes from Motor and Pedal). Before 2026, we will mainly manufacture these products, and at the same time build a supply chain and sales network to support electric scooters and electric motorcycles with high output power.
Reporter: Chinese companies are leading the electrification of two-wheelers.
Kinz Nomura: Jiangsu Niu Electric Technology (NIU) and Yadi (YADEA) in China sell millions of electric motorcycles every year. It may be a bit presumptuous to see Honda, which can only sell hundreds of thousands of vehicles, regard them as competitors. However, we will also establish a production system of millions of vehicles and are committed to building a sales network including services to establish competitiveness that is not inferior to Chinese companies.
Honda's gasoline motorcycle can also be said to be a competitor of electric two-wheelers. It is also necessary to publicize consumers the advantages compared to their own gasoline motorcycles - easy to use and cheaper prices.
Reporter: When did you start to feel a sense of crisis in the Chinese market?
Kinzi Nomura: Since more than 10 years ago, I have felt a sense of crisis. Due to China's restrictions on gasoline motorcycles, every time I go to China for business trips, I see a large number of electric bicycles driving on the road. I always think that electric bicycles in China are cheap, not something that Honda can achieve.
I want to sell electric two-wheeled vehicles, but it takes time to establish a supply chain of parts and achieve high quality and low price. Starting from 3 to 4 years ago, through a Chinese joint venture, we can launch products that can compete with Chinese products including prices. The sales scale continues to grow, and sales volume will exceed 100,000 vehicles in 2022.
Reporter: In order to shift business resources to electrification in the four-wheeler field, Honda withdrew from the F1 event. How do two-wheelers participate in the event?
Kinzi Nomura: 2-wheeler is not considered for withdrawal. The technical experience required in the highest-level two-wheeler events "MotoGP" and "Suzuka Eight Hours Endurance Race" can also be used for electrification. If technicians who can solve the problem within a limited time during the racing period can also be trained, it will also be conducive to the development of mass-produced cars. In addition to gasoline motorcycle events, we are also considering participating in electric vehicle events.
reporters are Nikkei Shimbun (Chinese version: Nikkei Chinese website) Yamaakaya Hirobuki and Tanabe Shizuka
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