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| Honda
presents the world
premiere of the 0
Saloon and 0 SUV
prototypes at the
Consumer Electronics
Show in Las Vegas on
Jan. 9, 2025. Credit:
Artur Widak/Anadolu
via Getty Images
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Honda
is being whipsawed by
a decreasing emphasis
on electric vehicles
in the United States
and a rapid shift to
EVs in China.
The two markets are
moving in opposite
directions, with
companies regretting
EV investments in the
United States and
facing intense
competition from
upstart EV
manufacturers in
China.
Honda is not a company
that expresses public
frustration, but there
was a sense of
disappointment in its
announcement last week
about canceling plans
for three models of
U.S.-made electric
vehicles.
The U.S. government
indicated just a few
years ago that it
would provide policy
support for a
transition to EVs and
encouraged automakers
to invest. Honda did
just that, including a
new battery plant in
Ohio in partnership
with LG Energy
Solution. Then voters
sent Donald Trump back
to the White House and
he dismantled this
industrial strategy
within months. Honda
and other automakers
were left exposed.
Financial losses and
job cuts followed.
That’s infuriating.
But here is how Honda
describes what
happened, filtered
through the language
of corporate
communication:
“Previously, with
stringent
environmental
regulations fully
implemented in the
U.S. and other
countries, Honda
pursued EV adoption
with strong
determination that
striving for carbon
neutrality is a
responsibility Honda,
as a manufacturer of
mobility products,
must fulfill for the
future,” the company
said in a news release. “However, in the U.S., the
expansion of the EV
market has slowed down
due to several factors
including the easing
of fossil fuel
regulations and
revisions to EV
incentives.”
I live in Columbus,
Ohio, and I wrote
about Honda for nine
years while covering
manufacturing and
energy for The
Columbus Dispatch. The
company’s main North
American manufacturing
campus is less than an
hour from Columbus,
with factories in
Marysville and East
Liberty, Ohio.
While Honda is based
in Japan, it produces more cars and light trucks in the United
States than its home
country and also
has a major presence
in China.
Honda’s announcement
included disclosure of
a $15.7 billion charge
related to
restructuring its
operations, which
means the company is
poised to post its
first annual loss in
about 70 years.
Previously, Honda had
said it would
manufacture three
electric models in
Ohio: the Honda
0—that’s a zero—SUV,
the Honda 0 Saloon and
the Acura RSX. Now,
all three are canceled
for production or sale
in North America.
They join other U.S.
models that were cut,
including those that
made it to production,
such as the Ford F-150 Lightning pickup, and those halted
before mass
production, such as
the all-electric Ram 1500 pickup.
It’s not clear what
Honda’s decision means
for the Honda-LG
battery plant that
began production late
last year in
Jeffersonville, Ohio.
That plant, which has
about 600 employees,
was going to provide
batteries for the RSX
and other models.
“As our company
assesses the impact of
Honda’s announcement
on our operations, we
are in discussions
with our parent
companies regarding
related future
business opportunities
that align with the
technology and
expertise we have
developed,” said
Caroline Ramsey, a
spokeswoman for the
battery plant, in an
email.
Honda’s other plants
in the state will use
the capacity that was
slated for EVs to
produce gasoline
models, including
gas-electric hybrids.
The company has
struggled with its EV
strategy over the last
decade. Its greatest
success has been the
Honda Prologue SUV,
introduced in 2024,
which is part of a
partnership with
General Motors and
shares components with
the Chevrolet Blazer.
The now-scrapped
models, headlined by
the Honda 0 series,
were part of the
company’s attempt to
signal a new
beginning, with fresh
designs and new
technology.
Honda is a major
reason Ohio is a
leader in automobile
manufacturing
employment, trailing
only Michigan and
Indiana. These next
EVs were going to be
Honda’s statement
about how it intended
to compete in the
market of the near
future.
Now, Honda and other
automakers in the U.S.
market are left to
watch and wait.
Rhodium Group, a
research firm, issued
a report this week
that gives a sense of
the scale of
investment that took
place in recent years
and the cancellation
of some of that
investment.
In 2025, companies
said they were
cancelling $22 billion
in previously
announced EV or
battery manufacturing
projects in the United
States, the report
said. This exceeded
the $17 billion in new
EV or battery
manufacturing
announcements made
last year.
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To
get a better sense of
what’s happening, I
looked at the
indispensable database of project announcements from
Rhodium and the
Massachusetts
Institute of
Technology Center for
Energy and
Environmental Policy
Research. It shows a
spike in investment in
2022, the year
President Joe Biden
signed the Inflation
Reduction Act, a law
with incentives for EV
manufacturing and
purchases.
Companies announced
$80 billion in U.S.
investment that year,
and another $47
billion in 2023.
About half of last
year’s cancellations
by dollar value, or
$11 billion, involved
projects announced in
2022. The largest was
a $4.3 billion EV
manufacturing project
from General Motors in
Orion, Michigan.
That’s a lot of
investment going up in
smoke, but I also urge
observers to note that
most of those 2022
projects are still
active, either
operational or under
construction.
What we don’t know is
if the cancellations
to date are just the
start of a larger
wave.
“The outlook looks
cloudier than it did a
year ago,” said Hannah
Hess, director of
Rhodium’s energy and
climate practice.
The next steps, she
said, will be
determined by many
factors, including
consumer demand for
EVs and automakers’
assessment of where
the market is heading.
“There’s just so much
uncertainty broadly in
the U.S. economy right
now,” she said.
One thing the Rhodium
report doesn’t capture
are layoffs at plants
that remain open, and
that’s something else
to watch.
SK On, the South
Korean battery
manufacturer, said
last week that it is laying off 958 people at a plant in
Commerce, Georgia,
that had 2,566 workers
before the reduction.
The company cited a
decline in demand for
EV batteries.
Some jobs and
investment could come
back. The United
States could reassert
itself as a place
where the cars of the
future are built.
But gyrations in
policies have a
cumulative effect,
reducing confidence in
the staying power of
any one policy. The
next time a U.S.
president says it’s
time to invest,
automakers are likely
going to react more
carefully.
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Other
stories about the
energy transition to
take note of this
week:
A Year After
the Green Bank’s
Demise, a Court
Mulls the Future of
Grant-Based Climate
Policy: The
legal fight continues
over whether grant
recipients from the
Greenhouse Gas
Reduction Fund will
ever see the money
they were promised, as
my colleague Marianne Lavelle reports for ICN. The outcome
could have drastic
effects on the ability
of future presidential
administrations to use
grants as economic
development or policy
tools if the next
administration has
broad latitude to
cancel recent
agreements.
Interior
Department Is
Allowing Solar on
Public Lands, But
Still Resists Wind:
The Interior
Department is
conducting reviews of
applications for about
20 solar projects on
public lands,
signaling a thaw in
the office’s approach
since last summer,
when activity was
halted, as Ian M. Stevenson reports for E&E News.
But onshore wind
appears to still be
frozen in place, with
one Biden-era project
in Wyoming in limbo,
with no signs of
progress.
Offshore Wind
Projects Meet Major
Milestones: Revolution
Wind off Rhode Island
has begun sending
electricity to the
grid and Vineyard Wind
off Massachusetts has
completed construction
and was already
sending electricity to
the grid, as Diana DiGangi reports for Utility Dive. The
projects have
continued to move
forward following
court decisions
allowing construction
to proceed despite the
Trump administration’s
attempt to halt work.
Revolution Wind is
partially complete,
with some of its
turbines fully
operational.
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