Honda Joins Electric Car Race with $40bn Investment Over Next Decade

Honda is joining the flurry of global automakers spending tens of billions of dollars to go electric.

The Japanese company announced Tuesday that it would invest approximately 5 trillion yen ($39.8 billion) to electrify its lineup over the next decade, including software and research and development.

It wants to launch 30 new electric vehicle models, including two SUVs and a mini car, by 2030. The manufacturer also plans to ramp up production to more than 2 million EVs annually.

Honda (HMC) is paying particular attention to the development of so-called “solid-state batteries,” a source of power that’s intended to be lighter and faster to recharge, and offer more traveling range than the lithium-ion batteries traditionally used to power electric cars.

So far, the company has sunk 43 billion yen ($343 million) into developing its own line of solid-state batteries, which it said it hopes to bring to market “in the second half” of this decade.

In the meantime, it still has to rely on lithium batteries, which it currently gets from external partners.

In north America, Honda has agreed to source batteries from General Motors (GM), though the Japanese company said Tuesday that it hadn’t ruled out the idea of forming a joint venture to produce such technology with another partner. In China, the Japanese company has a battery deal with CATL, a market leader and Tesla (TSLA) supplier.

Honda is joining the EV race later than many of its global rivals, which have announced similar multibillion-dollar investments in the past couple of years. Unlike some, it is also continuing to bet heavily on hybrids as a transitional technology.

Volkswagen (VLKAF) and Toyota (TM) have each put up at least $35 billion for EVs. Hyundai (HYMTF) has pledged the same sum to future-proofing its lineup, which includes investments in both electric and autonomous vehicles.

Honda’s stock was little changed on Tuesday in Tokyo, but it bucked a 1.8% drop for the Nikkei 225 (N225) index.

CNN