“100% EV/FCV by 2040”: an engine company sets a deadline (2021)

What it means for an engine company to set a deadline

The core of President Mibe’s declaration can be seen to lie less in electrification itself than in the fact that he promised the world a deadline for achieving it. For a company that made its name on engine technology to declare that it would take down that signboard itself gives a strong direction to both the values inside the company and the order of its investments. The series of moves — folding up production at Sayama and in Europe, and starting up EVs in partnership with others — connected into a single line only because this declaration existed. Rather than a nimble decision that seized the initiative amid good times, it was a decision to cut off any line of retreat while being pushed by the turning tide of regulation and technology, and in that lies the tension of this pledge.

That said, to set a deadline is also to lay bare the gap between the declaration and reality once conditions change. With EV growth slowing, the sight of Honda keeping the target while remeasuring execution region by region shows the danger of a strategy that bet on a single outlook. That President Mibe himself reflected on his lean toward a single scenario tells, alongside the weight of the pledge, that a declaration alone does not move a business. How will a company that promised to abandon the engine reconcile itself with the reality that the same engine supports its earnings for the time being — the road toward 2040 seems still to sway between the cleanness of the pledge and the speed of the market.