Honda Europe Needs To Quicken EV Pace Or Face Harsh Realities

Honda faces an uphill struggle in Europe because of its slow electric-vehicle program, but it’s not alone.

And it’s not just because Honda has come late to the electric party and its latest EV, the e:NY1, makes heavy weather trying to reach its battery capacity claim of 256 miles.

Britain and the European Union say EV sales must hit 80% by 2030. They both insist manufacturers must jump steep steps along the way. In Britain, each manufacturer’s EVs must reach 22% of sales next year, 28% in 2025, 33% in 2026, 38% in 2027, 52% in 2028, and 66% in 2029 before hitting at least 80% in 2030. The EU insists on a similar regime.

Manufacturers face a £15,000 ($19,000) fine in Britain for every internal combustion engine vehicle (ICE) sold outside the quota. There’s a complicated system for failing manufacturers to buy offsets from the likes of all-electric Tesla.

According to analysts, Japanese manufacturers Mazda, Subaru and Suzuki will also struggle to meet these requirements, as will Renault, JLR and Ford.

“Not only Honda, but all Western and Japanese manufacturers urgently need affordable small electric cars in order not to fall hopelessly behind Tesla and the Chinese manufacturers,” said Frank Schwope, Automotive Industry lecturer at the University of Applied Sciences FHM Hannover.

The little “e” town car, Honda’s first EV in Europe, didn’t do well. Its prettiness turned heads, but its price, close to £30,000 ($38,000) and limited range of often less than 100 miles, turned off buyers. The new Honda e: NY1 joins a crowded section of the European market for SUVs under £50,000 ($63,000). None of the contestants, bar Tesla, can claim an ICE-competitive range. Honda says the e:NY1 has a battery capacity of 256 miles, but my test data shows an average of only 162 miles after 5 charges, a more than 35% shortfall.

Not only that, battery monitoring was unreliable. Once, the vehicle claimed 199 miles of available range as the car was switched on. This was quickly slashed to 163 miles. Another time, 205 miles suddenly became 170. 203 miles dropped to 163. Later it settled for 150 miles and left it at that.

“Honda is still at the early stages of its electrification plans and needs help. The Honda e was its first attempt, but it clearly did not work. The e:NY1 is the second attempt but it is still not competitive enough to make a difference, especially in Europe,” said Felipe Munoz, Global Analyst at JATO Dynamics.

“Europe and the U.K. are not key markets for Honda. This means that the products we get are not conceived for the consumers in Europe. So whatever happens here is not likely to change its global strategies,” Munoz said.

Europe made up 2.4% of Honda’s global sales in 2022. In Europe’s first 10 months of 2023, Honda’s sedan and SUV sales fell 13.4% to 50,650 compared with the same period of 2022 for a market share of 0.5%, according to ACEA. Market share has halved since 2018. Honda shut its British factory in 2021.

Honda’s European market was 1.2% in 1980 and gradually slid since then. Honda’s U.S. market share was 2% in 1979 and went in the opposite direction, peaking at 10% in 2009. In 2022, Honda sold 881,000 cars and SUVs in the US, accounting for 6.7% of the U.S. market.

The e:NY1 won’t be sold in the U.S. A bigger SUV, the Prologue, will be launched there next year. Honda’s plans for Europe don’t yet include another EV, although it has said it plans globally to make more than 2 million by 2030.

Dataforce of Germany’s analyst Benjamin Kibies said the e:NY1 is late to the market and its €47,000 ($51,000) price makes it about €10,000 ($10,900) more expensive than competitors like the new Volvo EX30.

“Therefore, I don’t expect the e:NY1 to make up for 22% of Honda’s U.K. sales next year. The only option for them to get there would be to constrain deliveries of other models,” Kibies said in an email exchange.

“Honda will not survive on the European market without successful EVs,” Kibies said.

Kibies said Honda Europe has relied on hybrids to bring down its average carbon dioxide (CO2) emissions but this won’t be enough. The option to cooperate with Tesla to allow compliance is not sustainable. Kibies expects another, bigger electric SUV, the e:NY2, but affordable EVs are not yet on the horizon, according to Kibies.

Honda and some other manufacturers operating in Europe face a tough environment.

“Staying in the European market will require a considerable investment into electrification, while the market potential is shrinking through the overall market saturation and the entry of Chinese (manufacturers),” Kibies said.

“Against this background, the 2024 ZEV-mandate in the U.K. and the 2025 tightening EU CO2 targets can indeed be cutoff points for manufacturers that make the majority of their sales in other regions of the world. This is true for Japanese brands, such as Mazda, Subaru and Suzuki but also for Ford, who need to rely on VW (technology) to stay in the game,” Kibies said.

University of Applied Sciences’ Schwope agrees, and it’s not only Honda that is coming under pressure from the Chinese.

“The traditional Western manufacturers are all in the same boat and the call for protectionist measures against the Chinese brands is likely to grow stronger,” Schwope said.

“However, China is already the most important sales market for many Western manufacturers, so in the end all sides would lose out as a result of protectionist measures. Ford, Renault and Honda, but also JLR, are likely to suffer the most from the disruption towards electromobility,” Schwope said.

Honda e:NY1 Advance

Electric motor power: 201 hp

Torque: 310 Nm

Gearbox: one-speed automatic

Battery: 68.8 kWh lithium ion

Claimed battery range: combined 256 miles (WLTP)

WintonsWorld battery test range: 162 miles (5 charges, shortfall 37%)

Highway cruising penalty: 27%

Highway cruising range estimate: 118 miles

Drive: front wheels

Acceleration: 0-60 mph 7.5 seconds

Top Speed: 99 mph

Price: £47,845 after tax ($60,500)