Sony and Honda Motor of Japan announced on Thursday that they would form a joint venture with an equal stake in the company that will begin selling electric vehicles in 2025.
Honda, like its larger rival Toyota Motor, has been slower to transition to electric vehicles (EV) than other major automakers, and it is under pressure from investors to produce cars that are carbon-free and equipped with modern technologies, like as self-driving capabilities.
The automaker, which now only provides one electric vehicle, the Honda e, has stated that by 2030, it wants to release 30 EV models and produce 2 million EVs yearly.
Honda will provide its car-building and sales skills, while Sony will contribute its software and technology knowledge to the JV, which was initially unveiled in March and dubbed Sony Honda Mobility.
The JV will cost each business 5 billion yen ($37.52 million). The JV’s chairman and CEO will be Yasuhide Mizuno, a top Honda official, while the president and chief operational officer will be Izumi Kawanishi, a Sony executive vice president.
Honda, the developer of popular vehicles such as the Accord and Civic, is contending with dwindling profit margins as raw material costs have risen and manufacturing has been hampered by a global chip shortage.
Earlier this year, the business said that it will collaborate with General Motors to produce a series of lower-cost electric vehicles based on a new joint platform, building on plans for GM to begin producing two electric SUVs for Honda in 2024.
Honda and other Japanese manufacturers’ shares fell between 3% and 5% on Friday, as global stock markets fell amid fears that central banks’ rapid interest rate hikes will push economies into recession.