The world is heading toward carbon neutrality and technology advancements. The automobile industry is experiencing a big wave of change in CASE* technologies. At its press briefing on April 12, 2022, in addition to its upcoming EV lineup, Honda announced the direction of its business transformation for the future with the keywords of “software” and “connected.” At the core of Honda’s transformation is its Business Development Operations, newly created at the beginning of this fiscal year. How will the transformation of Honda affect people’s daily lives and mobility in the future? Shinji Aoyama, who is in charge of the new Business Development Operations, shared his views.

*CASE: Connected, Automated, Shared, Electrified

Electrification is One Step toward Carbon Neutrality

── You have become the head of Business Development Operations, a new operation established at the beginning of this fiscal year. What do you plan on doing?

We will be tackling a wide range of areas that will support Honda in the future, such as software and electrification, but our fundamental aim is to achieve carbon neutrality by 2050.

In these times, based on the concept of LCA (Life Cycle Assessment), manufacturers are held responsible for CO2 emissions spanning the entire product lifecycle, from procurement of raw materials, production processes, distribution and all the way to disposal. Being expected to fulfill our societal responsibilities, in which areas and how much should Honda contribute? These questions must be answered now.

Business Development Operations will be committed to pursue wide-ranging initiatives toward the realization of carbon neutrality, including the use of renewable clean energy and “resource circulation” which means cyclical use of various resources . Electrification, as we explained in our briefing on April 12, is one of the major steps in our roadmap to realizing carbon neutrality.

── Until recently you were in the U.S. as Chief Officer responsible for the North American region. Do you feel any difference between Japan and the U.S. in terms of people’s awareness of carbon neutrality and EVs?

There is momentum in the U.S. toward electrification, and EVs are a common sight. There are some regional differences, but California, for example, has an abundance of charging facilities, and we don’t feel any inconvenience while driving an EV.

On the other hand, Japan is a unique country where hybrid vehicles have achieved a high rate of adoption. As a result, Japan has fallen behind the world in the popularization of EVs.

Also, in view of infrastructure such as charging facilities, I believe it will take more time to popularize EVs in Japan compared to the U.S., China and Europe.

── A wide range of EV models for various countries and regions was announced at the press briefing on April 12.

From now to the mid-2020s, different countries and regions will have different levels of EV penetration, which makes it difficult for us to introduce our EV models globally using standardized platforms. So, our current strategy is to take a region-by-region approach.

For example, in China where a lot of progress has been made with electrification, we will evolve EV platforms developed exclusively for China and introduce ten EV models by 2027.

Although the EV market is expanding in the U.S., it is still small compared to the overall market size. That is why Honda will introduce two mid- to large-size EV models in 2024, that are currently being developed jointly with GM.

Japan is still at the dawn of the EV era. We know that there is demand with environmentally-conscious corporations, so we decided to begin with a commercial-use mini-EV.

── What is your prospect for the time of EV popularization?

We predict the popularization of EVs will proceed on a global basis from the second half of the 2020s, so we will begin to roll out a common EV platform globally.

We will introduce a large-size platform mainly in North America in 2026, followed by a mid-size platform in co-development with GM in 2027, and then a small-size platform for Asian markets, including Japan.

Initially, we will have a lineup of EV platforms tailored to each region, but we will consolidate them to large, mid, and small platforms in the future.

── It was also suggested at the April 12 press briefing that Honda will develop two (specialty and flagship) sports models.

Honda’s core fans in Japan and other regions have high expectations for our sports models. Vehicle performance and driving experience have been and will be Honda’s strengths even in the era of electrification.

There is no doubt that one of our goals is to offer EVs that are just as fun to drive as our gasoline-powered models. We hope to do something that will surprise all of our Honda fans.

Connecting Cars through Software

── Honda also set a direction to combine its vehicles and software. How will Honda cars change in the future?

From the 2010s, Honda has worked on connecting cars to the network for various services including a music distribution service for our vehicles.

The electronic platform of EVs is more compatible with network-connectivity than conventional cars. So, the users will be able to update or upgrade functionality or performance of their vehicles through the network after the purchase.

For example, if our customers wish for greater acceleration performance or to reduce acceleration to increase the range, they will be able to change output characteristics of their vehicles after the purchase.

── So it will become possible for our customers to personalize their cars to their tastes after the purchase.

Customers will be able to keep upgrading their vehicle’s ADAS (Advanced Driver Assistance Systems) to have even higher functionality for their safety and peace of mind. We will be able to offer new services such as music and movie distribution in the areas of IVI (In Vehicle Infotainment). In other words, our car will become like a huge smartphone.

When our hardware and software are combined, the “joy of driving at the will of the driver,” which Honda has been offering based on the advancements of hardware, will evolve into an experience optimized for each individual.

At the same time, the advancement of ADAS and IVI will enable our vehicles to offer many different ways to enjoy mobility while offering great peace of mind not only for the driver but for all occupants.

The experience people will have with cars will become increasingly personalized.

── The more Honda mobility products get connected, the more “terminals” we have to obtain data from. What can happen when all those connected products are networked?

When all types of Honda mobility products become connected, and if we can compile all the data, including the data of pedestrians who are carrying smartphones, it will lead to the realization of a more sophisticated traffic society.

V2X (Vehicle to Everything) is now a popular buzzword. Just to give an example, we are making progress in our research on safety technology which connects the data of vehicles and pedestrians to “visualize” the pedestrian who is obstructed from the view of the driver by something like a parked vehicle or building and alerts both the pedestrian and driver to potential dangers.

Vehicle-to-grid connectivity enables EVs to supply electricity during on-peak hours or at the time of a power outage by give unused electricity back to the power grid, which makes it possible to utilize EVs as infrastructure for efficient energy management for the entire society.

There is a wide variety of solutions we can develop for our society.

Evolving Honda Business Model

── How will Honda change in the future?

Under the current business model, if Honda sells 5 million cars per year, that means we serve 5 million customers per year. But when connected cars become mainstream, if we sell 5 million cars, which will be in use for, let’s say, ten years, that means we will be providing new services to 50 million users.
Similar to smartphones with free system updates and paid apps, we can create new businesses by offering paid upgrade plans for our customers to add new value to their cars according to their preferences.

This increases Honda’s business opportunities, but more importantly, Honda’s chance to contribute to society.

What I talked about today is something Honda has already been working on. Business Development Operations which I lead consolidates similar initiatives currently being carried out separately by our automobile, motorcycle and power products operations. In doing so, we aim to further enhance our capability and accelerate our initiatives.

Honda is at a point where it must transform, so we have to move forward on all fronts with no hesitation.

We want to continue focusing on offering fun and joy to our customers. To this end, I want to see Honda maintain its unique characteristics and passion to continue offering innovative and original services at the forefront of the times.