On March 26, Japanese automaker Honda unveiled its dedicated pure electric vehicle (EV) plant in China, which began production in 2024. By integrating artificial intelligence into the welding process, the facility is designed to operate with 30% fewer workers than previous plants. As Chinese automakers continue to dominate with aggressive pricing, Honda's ability to scale efficient EV production globally will be closely watched. This new factory serves as a critical test for the company's future growth.
Honda’s joint venture with Guangzhou Automobile Group—GAC Honda—began production of its new all-electric SUV, the P7, scheduled for release in April. To mark the occasion, the company gave the media a tour of its EV-dedicated plant in Guangzhou, Guangdong Province.
Inside the plant’s stamping section, autonomous transport vehicles, identifiable by their green lights, move body components. In contrast to older factories, where human-operated forklifts were used, this new facility has eliminated human labor in this phase of production.
In the EV assembly line, automation has been implemented in 28 of the 107 production steps—about 30% of the process. The factory also employs an AI-driven welding system that optimizes current, voltage, and angle, further reducing workforce requirements by 30% compared to previous facilities.
GAC Honda’s Vice President, Yuji Ito, stated, “Electrification will completely redefine how we manufacture automobiles.”
In China, new energy vehicles—including EVs and plug-in hybrid vehicles (PHVs)—are projected to account for 49% of new passenger car sales in 2024. GAC Honda’s General Manager, Katsuhide Moriyama, remarked, “The shift toward electrification in the Chinese market is unmistakable.” Honda has now become the first global automaker to establish an EV-dedicated factory in China.
However, Honda has struggled in the Chinese market. A slow ramp-up in new energy vehicle offerings led to a 30% year-over-year decline in new car sales in 2024, falling to 850,000 units, with EVs making up just 10,000 of those. In quarterly terms, sales of hybrid vehicles (HVs) in October–December 2024 dropped by 60% compared to April–June 2023.
With neither gasoline nor hybrid vehicle sales expanding in China, Honda has faced overcapacity and excess labor. Aside from its new EV plant, Honda’s overall production capacity in China has shrunk from 1.49 million units at the start of 2024 to 960,000 units. In this transition period, boosting production efficiency for EVs is critical.
Meanwhile, leading Chinese automakers are also innovating in manufacturing. Seres Group, which has a co-branded partnership with Huawei Technologies, has installed 3,000 robots at its factories.
Honda aims to make all new vehicle sales EVs or fuel cell vehicles by 2040. GAC Honda’s Ito emphasized, “The knowledge we develop in improving assembly efficiency will be valuable worldwide.” Establishing a scalable global EV production system will be key to the company's future success.