Sony and Honda said they would form a joint venture to produce electric vehicles in a deal bringing together two of Japan’s most storied industrial names to take on Tesla, emerging Chinese players and traditional carmakers.
Targeting the high valuations Tesla and other EV makers achieved before the recent sell-off in technology stocks, chief executives of both companies told reporters in Tokyo on Friday they would be open to floating the joint venture on public markets.
The blockbuster tie-up underscores how Japanese companies are working to catch up in the global race for EV dominance, with Honda’s domestic rivals, Toyota and Nissan, both announcing spending plans worth tens of billions of dollars at the end of last year.
It will also allow Sony to deploy its formidable sensor technology that is critical for autonomous driving, as it works to reclaim its top position in consumer electronics after being undermined by competitors including Samsung.
Honda chief executive Toshihiro Mibe said the new company would “stand at the forefront of innovation, evolution and expansion of mobility around the world by taking a broad and ambitious approach”. The company is expected to be established this year with sales of the first EV due to start in 2025.
Honda said it would take responsibility for manufacturing the first EV model at its plant, while Sony said it would develop the mobility service platform for the new company. The platform could be used by Honda and potentially sold on to other carmakers.
“We want to lead the change in mobility, so we will create a JV, and if Sony’s network platform and services can be used by the JV, Honda, or other car companies, we will be able to contribute more,” said Kenichiro Yoshida, Sony chief executive.
The announcement came less than two months after Sony said it was launching a new company to “explore entry” into the EV market and unveiled a prototype vehicle.
Mibe said the joint venture brand would be “distinct” from the Honda brand, which is pursuing its own mass-market electric vehicles with General Motors for sale in North America by sharing parts, including vehicle platforms.
“There is a possibility that if the joint venture generates interesting new value, there will be feedback into Honda, but that is not part of Honda’s own strategy,” Mibe added.
Sanshiro Fukao, a senior fellow at the Itochu Research Institute, said that Honda was the logical choice for such a partnership. In April last year, the company announced that it was completely phasing-out gasoline cars to focus on EVs.
The new company is expected to have ready access to chips as Japan builds chipmaking capacity. Sony is building a new semiconductor plant in Japan together with the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co, and the Japanese car parts giant Denso, with the aim of producing chips by 2024.
“These chips could well go into the Sony-Honda cars, and there is already a lot of speculation on how these chips would be used,” Fukao said.
Yoshida said he picked Honda because of its long history and technological expertise in carmaking and aviation.
Mibe said that while the companies “share many historical and cultural similarities, our areas of technological expertise are very different”.
