Honda and Hitachi Automotive Systems (HAS) have established a new joint venture that will develop, manufacture and sell all-electric vehicles.
The two Japanese brands are investing ¥5 billion (about £34 million) into the new company, with HAS taking a controlling stake of 51% ownership to Honda’s 49%.
It will produce its own vehicles and also supply other manufacturers with electric vehicle hardware, something a spokesman told Autocar was a response "to the growing global demand from automakers for electric vehicle motors".
The move is seen as a way for Honda to meet an ambitious, self-set target for two-thirds of its sales to be of electrified models by 2025. The target was announced as Honda formed a new Electric Vehicle Development Division in October 2016.
It also confirmed plans to launch two electric vehicles in 2018, which the spokesman suggested will benefit from this new joint venture. "Honda is planning to work with the new company for development and production of its electric motors," they said.