Green

Late to the party, Honda unveils plug-in vehicle strategy

With General Motors, Nissan and Mitsubishi all moving forward on plans to launch plug-in and all-electric vehicles in the next two years, Honda — one of the largest automotive companies in the world — has been conspicuously absent. But no longer.

Today, the company announced that it will have both a plug-in hybrid and an all-electric model on the market in the U.S. and Japan by 2012 — the first time the company has committed to green vehicles since it scrapped its electric Honda EV Plus more than 10 years ago.

The new strategy will progress in phases. By the end of this year, and throughout 2011, the company will be running a demonstration program for battery-powered vehicles, allowing them to be tested by an array of partners, including Stanford University, Google and the city of Torrance, Calif.

Honda remained mum on exactly what its all-electric vehicle will look like, or whether it will be a conversion of one of the company’s current models. AllCarsElectric, one of VentureBeat’s editorial partners, predicts that it will probably be a real-word version of Honda’s EV-N concept car (pictured above), which made its debut at the Tokyo Motor Show last October.

The company also showed off plans for its Civic Hybrid for the first time today. The car will run off a lithium-ion battery built by Honda’s joint venture with GS Yuasa, called Blue Energy, which already has a manufacturing facility up and running. Batteries for the Civic Hybrid will start rolling off the assembly line before the end of 2012, the company said.

On top of this, Honda said it will expand its current portfolio of hybrid vehicles, which includes the Insight and CR-Z, to include the Fit Hybrid — ready to be launched in Japan this fall. All of these models fall into the category of “mild” or “gasoline-electric” hybrids, which don’t have a pure-electric mode. Rather, they use a small, high-voltage battery pack to extend the range of a fully-functioning internal combustion engine.

Honda has been hedging its bets on the new electric vehicle industry for a while now. As Earth2Tech points out, as recent as May, the company’s leadership was vocal about lacking confidence in the market considering the level of technology available, short driving ranges, and high prices.

Clearly, its attitude has shifted, and faster than predicted. No doubt, the rapid pace of EV and plug-in development at chief competitors is a motivating factor. General Motors and Nissan seem to be way out ahead of the pack, launching their cars by the end of the year with price tags that most middle-class consumers can afford. And just last week, Toyota announced that it will be building a new line of all-electric RAV-4 SUVs in tandem with Tesla Motors by 2012 too. Honda is still at risk of falling too far behind to compete in what will still be a small market for years to come — unless it can come out with truly unique technology.

Previously, the company has favored hydrogen fuel-cells over electricity as the superior direction for next-generation transportation. But development in that area is slow, hardly anyone is working on infrastructure for fuel-cell vehicles, and the technology remains prohibitively expensive.

Honda CEO Takanobu Ito said the new plug-in strategy is also being accelerated due to policy changes in the U.S., especially California’s new zero-emission mandate, which requires the world’s largest automakers to build a total of 7,500 electric or fuel-cell vehicles and 60,000 plug-in hybrids between 2012 and 2014. Honda has been buying zero emission vehicle credits from Tesla Motors in order to comply with regulations and continue selling cars in the state.

(Notably, Tesla has been relying on sales of zero emissions vehicle (ZEV) credits to supplement its revenue, especially considering slow sales of its Roadster and its lack of new product launches in the next two years. But with major automakers starting to produce their own green cars, reducing the demand for credits, Tesla may see these sales dwindle.)

To supplement its green car strategy, Honda said it will be building a new motorcycle factory in Indonesia next year and debuting its new EV-neo electric scooter in Japan in December, followed by another electric bicycle in China next year.