Hitachi and Honda will create a joint venture to develop electric motors

Both companies will join forces to reduce the production costs involved in developing electric vehicles.

Hitachi Automotive Systems and Honda Motor have announced the signing of a Memorandum of Understanding (MoU) with the aim of creating a joint venture for the development, production and sale of electric vehicle motors. The signing of the agreement to establish the joint venture is scheduled for late March 2017, at which point both companies will discuss the details of this new business relationship. The definitive creation and launch of the project could take place in July 2017.

The headquarters of this collaboration will be in Ibaraki Prefecture, located in the Japanese city of Hitachinaka. However, both Honda and Hitachi are considering setting up subsidiaries in the United States and the People’s Republic of China with the aim of expanding the global supply of electric motors.

Together, the two companies will invest a total of 5 trillion yen to create this joint venture. Hitachi Automotive Systems will be the majority shareholder with 51% of the shares, while Honda Motor will hold 49%.

The collaboration agreement between Honda and Hitachi has been driven by the gradual growth of environmental conservation measures and regulations in the automotive sector. This legislative shift could inevitably translate into a growth of the electric vehicle market on a global scale. Based on this circumstance, both companies have signed this MoU with the aim of generating synergies that help reduce costs in the production of electric motors. This will be achieved through the development of new technologies and economies of scale.

Hitachi Automotive Systems began commercializing motors for electric vehicles in 1999. Since then, the company has evolved its products and technological capabilities by developing lightweight, high-performance powertrains for compact electric vehicles. Despite the creation of this joint venture, Hitachi Automotive Systems will continue to promote its business activities with the vehicle manufacturers that already receive motor supplies from the company.

Honda has also focused on expanding its range of electric vehicles since 1999, when the Japanese manufacturer launched its first hybrid car, the Insight.

Source: Newspress