General Motors and Honda are forming a strategic alliance for the North American market.

The two automakers announced that they intend to join forces. (But don’t get confused, this isn’t a full merger.) Under terms of the agreement, the two companies will jointly develop future vehicle platforms. That includes both electric and internal combustion powertrains. The intent is to combine resources in order to cut costs. That should enable both brands to invest more heavily in future technologies.

Honda Electric Vehicles Will Use GM Batteries

Most recently, GM and Honda announced plans to jointly develop GM’s Ultium batteries for electric vehicles. They also said Honda will incorporate GM’s OnStar system into two new electric vehicles, which should be on sale in the U.S. by 2024. At that announcement in April 2020, Honda emphasized that their products will still retain their own character.

The companies also have a partnership to develop fuel cells, batteries, and GM’s majority-owned subsidiary Cruise. However, Honda is still a minority owner of Cruise, following a $2.75 billion investment announced in 2018.

Deal To Free Up Cash For Both Companies

Honda and GM said in a joint news release that they have signed a non-binding memorandum of understanding concerning the alliance. The combined efficiencies of the companies are expected to free up cash for both. That financial freedom will be used to invest in next-generation autonomous and EV technologies.

The automakers see this alliance as the best way to save money on developing future platforms and products. Beyond jointly developing propulsion systems and vehicle platforms, the alliance will also strengthen other business focuses. That includes joint purchasing and collaborations on research and development for advanced driver assist systems, infotainment products, and connectivity.

Source: GM

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