Honda switches from hydrogen to batteries for 2012 launch

Honda will start selling a battery-powered car in the US and Japan in 2012, the firm announced yesterday.

It will also launch a mid-size plug-in hybrid in the same year as it joins the race to manufacture more environmentally friendly cars.

Chief executive Takanobu Ito told reporters that the firm had no future without making vehicles that emitted less carbon dioxide.

"The next 10 years will be a true test of Honda's survival," he told Bloomberg.

It is the first time the firm, which already makes the Insight and CR-Z hybrids, has set a firm date for launching electric cars.

Honda was one of the first manufacturers to market a petrol-electric hybrid, but the firm had previously favoured hydrogen fuel cells to batteries as the future technology for cars. However, inadequate infrastructure development in that area has led it to revise plans.

Nissan is already taking orders for its Leaf electric car, due to be launched in Japan and the US later this year. Toyota is also planning to launch an electric vehicle model in 2012 after recently forming an alliance with California start-up Tesla Motors.

US fuel-economy rules that phase in after 2015 will accelerate the addition of plug-ins and hybrids to the market, say analysts.

Ito also confirmed Honda would develop a new line of more fuel-efficient transmission options and a new two-wheeler to compete in China's massive electric bicycle market, estimated at more than 20 million units a year.

Among other steps to lower carbon dioxide emissions, Honda plans to launch a new small diesel model in Europe in 2012 as well as revamp its gasoline engine and transmission line-up to improve fuel efficiency of its fleet.

With governments and consumers increasingly seeking to lower fuel consumption, Honda said it would further step up its development of micro-cars, moving production of some 660cc mini-vehicles back to its main Suzuka factory i n Japan in 2012, from licensed manufacturing unit Yachiyo Industry.

"Through mini-vehicle production at Suzuka, we aim to hone manufacturing technologies that will contribute to the reduction of vehicle weight and costs for all future models," Ito said.

Honda also unveiled plans to build a new motorcycle factory in Indonesia in the latter half of 2011, boosting its annual output capacity by 500,000 units to 4 million in the world's third-largest motorcycle market.