General Motors Co. and Honda Motor Co. plan to jointly develop a line of affordable electric vehicles, deepening strategic ties as they work to bring costly plug-in technology to the mass market.
GM and Honda said Tuesday they would work together on underlying technology that would be used to produce several electric models, including compact sport-utility vehicles, for North and South America and China.
The first of the vehicles, which likely would be priced below $30,000 in the U.S., won't be ready until 2027, the companies said.
The auto makers said splitting development expenses and working together to reduce battery costs -- the costliest component of an EV -- would allow them to drive down the price while producing electrics at scale globally.
The new system eventually would be used in millions of cars sold by both companies, they said.
Car companies increasingly are joining forces on engineering projects, outside of mergers or cross-ownership deals, to defray the high costs of developing electric cars and other advanced technologies.
The GM-Honda project extends work between the companies in other areas, including driverless cars.
Relatively high prices for electric cars remains a key hurdle to broader adoption.
The average price paid for an EV in the U.S. is around $60,000, compared with about $45,000 for all vehicles, according to research website Edmunds.com. The large battery pack needed to power an EV can account for roughly one-third of overall cost.
Low-priced EVs today have largely been limited to China, where local brands and major auto makers offer small, bare-bones plug-in cars with limited driving ranges.
GM's Chinese Wuling brand, for example, has had success selling an inexpensive EV, the Hongguang Mini, priced around $5,000.
Tesla Inc. chief executive Elon Musk has said the company eventually wants to introduce lower-priced models to broaden EV adoption.
In 2020, he said Tesla planned to make an EV priced around $25,000, but earlier this year he said that project had been temporarily shelved.
EV models recently introduced in the U.S. and Europe are pricey and generally sold in small volumes, other than several entries from Tesla, which leads the EV market in sales. GM recently introduced a GMC Hummer electric pickup truck priced at more than $100,000.
GM has said next year it would introduce in the U.S. an electric Equinox compact SUV that will start around $30,000.
A future SUV from the project with Honda would be smaller and less expensive than that, said Ken Morris, GM's vice president of electric and autonomous vehicles.
"The beauty of it is getting down to a price point that opens it up to more customers and more volume," he said during a media briefing.
The vehicles will be built using a version of GM's EV technology, a layout of battery cells, electric motors and other components called Ultium.
Joint purchasing of parts and standardizing factory equipment should squeeze costs to enable the companies to offer the EVs at affordable prices, Mr. Morris said.
Rick Schostek, executive vice president of corporate operations for Honda's U.S. division, said the future EVs would be built using Honda's existing factories and workforce, including some output in North America.
A GM spokesman declined to specify manufacturing plans.
Other auto makers have worked together on electric cars to contain costs. Subaru's Solterra SUV, expected to go on sale in the U.S. later this year, was developed with Toyota Motor Corp.
Ford Motor Co. is planning two electric vehicles for the European market using technology provided by Germany's Volkswagen AG.
Such alliances can help car manufacturers reduce costs by adding scale on parts purchases and factory output. But they have a mixed record of success amid the difficulty of melding complex operations across regions and corporate cultures.
The GM-Honda project is the latest technical collaboration between the American and Japanese auto makers, including co-development of electric cars.
Honda plans two future EVs that will use GM's Ultium system: the Honda Prologue, scheduled to go on sale by early 2024, and an SUV for Honda's upscale Acura brand.
The companies also have work going on hydrogen fuel cells and gas-engine vehicles in North America.
