Honda & Hitachi join hands to develop electric vehicle motors

Honda Motor Co. Ltd. and Hitachi Automotive Systems Ltd. have signed a Memorandum of Understanding (MoU) to build a joint venture company which will be responsible for development, manufacturing and sales of electric motors. These motors will be used in petrol-electric hybrid as well as full electric cars.

Through this joint venture, both companies are planning to enhance the economies of scale in order to offer electric vehicles and components at a competitive price. With the electric car market set to see a major growth in the next decade, automakers around the world are teaming up with other companies and component suppliers to sustainably develop electrical mobility solutions and mechanical components.

As per the signed MoU, 51% of the JV company will be owned by Hitachi while the rest of the share will be under Honda's ownership. Both companies will be cumulatively investing around $44.5 million. Honda and Hitachi will now be conducting formal discussions regarding the new company's establishment. A definitive agreement is expected to be signed by the end of March 2017, while the new joint venture company will officially be established in July this year.