Innovation

As televised and shared by many scientists, climate activists, and concerned politicians and citizens, the effects of climate change worsen year after year due to a lack of remediate action. It is of the utmost importance that every company and individual, no matter the demographic or industry, take up their share of responsibility and work to combat climate change. This is why Honda has set new goals for their company. Leaving behind what is considered to be an integral component of the automotive industry, Honda is transitioning their focus and manufacturing lines from internal combustion engines to electric batteries. By 2040, all sales made by Honda will be from electric vehicles.

Conventional vehicles, as we all know, run on gasoline. Gasoline is a nonrenewable resource; fossil fuels are not easily replenished. Burning these fossil fuels are harmful to the environment, and a major threat to the atmosphere and our well being due to the greenhouse gasses emitted during consumption. Electric vehicles eliminate the use of gasoline as a whole by running on electric batteries. Electric batteries are more cost efficient, as it is cheaper to charge batteries than refuel tanks, and maintenance costs are generally lower as there is no engine to maintain. The transition from conventional cars to electric vehicles supports the transition from irresponsible consumption and a dependency on fossil fuels, to more mindful consumption and cleaner energy. These actions ultimately lead to impactful progress towards the reversal and mitigation of the effects of climate change. With zero emissions, low operating costs, and government mandates, electric vehicles are the future of the automotive industry.

Inspiration

Ryan Harty, Division Head of CASE & Energy Business Development at Honda believes that “fundamentally, EVs make better personal transportation products than internal combustion engines do.” Harty shares that EVs are cars with incredible torque attributed to the electric motors which provide breathtaking acceleration all while being smooth and quiet. EVs are Honda’s pathway to zero carbon energy, and one step in their goal to eliminate their impact on climate change.

The goal is:

“100% EV sales by 2040. Nobody wants their customers to be the last ones looking for a place to buy gasoline. Honda doesn't want its dealers to be the last ones selling ICE vehicles. And Honda doesn't want its suppliers to be the last ones flogging piston rings. But also the IPCC reports are pretty stark, and the Paris Climate Agreement is directive: all society needs to transition from fossil fuel powered to zero carbon energy powered, as soon as possible. Electric cars are an application that can be executed early in this transition.” (Harty, 2022)

The dire need for action is evident in the mandates and agreements passed by politicians around the world; encouraging the transition from conventional to electric. Emphasized by Harty, CO2 emissions standards are becoming more and more stringent. The more urgent our climate emergency becomes, the more inflexible and strict the law becomes. However, Honda is motivated to keep up with changing trends, industries, and climates. With electric vehicles becoming more popular (eventually becoming obligatory), efficient reformation is critical. On top of improved performance and maintenance, EVs having zero emission rates at the production level make electric vehicles the optimal innovation to allow the automotive industry to adapt to the needs of the deteriorating health of our climate. As Harty says, “The writing is on the wall - time to change.”

Overall impact

The positive impact this innovation will have for the environment and society is the reduction in greenhouse gas emissions on a full lifecycle basis. Carbon dioxide is the primary greenhouse gas that has contributed to climate change. The recent increase in greenhouse gasses due to human activity (the use of automobiles) has altered the climate of the planet and has had harmful impacts on our ecosystems. Electric vehicles will help in the reduction of air pollution since electricity is a locally generated source of energy, and electricity can be generated by renewable sources of energy. It removes some aspects of geopolitics from the energy value chain. Honda is formalizing its plans to become carbon neutral for all of its products and business operations by 2050. They hope to make every product they sell use 100% of recycled and sustainable materials. With no virgin material from the Earth, this will be a revolution in their material supply chain.

Additionally, EVs can function through dispatchable demand, meaning they can be charged when renewable energy is being generated, which increases the amount of renewable energy that can be generated and stored by the electric grid. EVs can also function as energy storage assets to return energy to the customers home during a grid outage, or to the grid to support any need for energy. Honda’s short term concern is that there will be a drastic increase in the mining of lithium, nickel, manganese, cobalt, neodymium, and other rare earth elements. This will still be more sustainable than burning fossil fuels in the long run, as there are plans for recycling and reusing said elements. It is challenging for Honda to have a standard approach on the global adoption of electric vehicles because of geographical issues including customer acceptance, infrastructure readiness, and the availability of renewable energy. As for the long term effect we expect the recycling stream of lithium ion batteries to supply the vast majority of elements required for the production of batteries. Honda’s intention to make these batteries accessible for their new EV models will ensure advanced competitiveness of future Honda EVs.

Business benefit

It has been proven that ICE cars require a lot of maintenance and they pollute the environment. Therefore, Honda’s plan is to get rid of ICE cars and produce electric vehicles only, by 2040. The average price for a non-luxury car is around 40,000 dollars. Honda aims to build an electric vehicle that costs less than 28,000 dollars within the next 4 years, with the goal of developing an electric car that’s affordable and accessible. According to polls, the upcoming generation prefers electric cars over cars that run on traditional engines, in addition, people nowadays also prefer having an electric car for technological, safety, and maintenance reasons.

When it comes to the marketing aspect, Honda does not have to worry about advertising their EV products because electric cars will be a requirement in the future; already satisfying environmental and consumer needs meaning there is minimal need for intensive marketing. This business transition will have a huge impact on Honda as it will lead them to more business opportunities, creating additional job opportunities! The automotive industry is struggling in the market as of right now in comparison to other industries, therefore it is very crucial to produce electric cars in order to boost the automotive industry. Many car corporations do not have options to change in manufacturing or production lines, or develop the business. With the help of electric cars, we can diversify energy businesses. It is difficult to compete with oil companies in the oil value chain, but Honda can enter the power generation and energy management value chain. This will support Honda in the competition against giants in the electric vehicle industry, taking Tesla as an example.

Social and environmental benefit

In a world plagued by air, water, and land pollution, life is rapidly becoming one that is filled with ailments and diseases. Specifically, the automobile industry has caused extreme levels of carbon emissions which have major negative effects on the climate and its forecasts. In Honda’s case, their initiative for an all-electric industry and product is the future of the automotive world for many reasons that benefit both society and the environment.

As for environmental impacts from electric vehicles produced by Honda, there are too many to count. A significant benefit of the transition to electric vehicles is the reduction in the speed and mitigation of climate change and its effects. EV’s, on average, produce less than half the emissions of a gasoline powered vehicle. Another environmental impact that EV’s provide is less air pollution in the local areas. There is a significant reduction in the brake dust produced by an EV. The braking system is one that negates the necessity for a brake pedal that would cause severe friction on the ground. Therefore the air that people will inhale is less harmful to them. EV’s also do not require the usage of vehicle lubricants and fluids which are yet another concern for the environment. The release of oil for example in cars is a cause for high concern. The oil that leaks from standard gasoline cars can get washed into drains on the streets leading to lakes, streams, and rivers. The toxic compounds in the oil then build up for years, creating unsafe conditions for humans and wildlife.

The societal impacts of EV’s coincide with the environmental impact. For example, EV’s create a larger decentralization of the generation and consumption of power. Essentially, electrical cars act as a system that stores and delivers energy in a more efficient way. The integration of EV’s into society also reduces the need for imported oils from other countries. This will most likely result in more stable energy prices. Additionally, from a more consumerist standpoint, EV’s allow for a smoother, quieter, and more relaxing experience. Electric vehicles are far less noisy than petrol or diesel cars. This is extremely beneficial in highly populated urban areas with hectic roads; there will be a major reduction in noise pollution. Another consumer benefit of electric cars is the reduced costs to operate the cars. In the long run, electric cars are cheaper when comparing the possible distance traveled per unit of energy to the distance capable by standard gasoline cars. One will save money using electric cars.

Interviews

Bruce Laga, Operations Director DCH

Ryan Harty, Division Head of CASE & Energy Business Development