GM-Built Acura EV Halted as Honda Cites Weak Demand
Honda's decision to end production of the Acura ZDX EV, built on GM's Ultium platform, signals growing headwinds for the electric vehicle market.
Honda is ending production of its Acura ZDX electric crossover, a vehicle assembled by General Motors (GM) in the U.S., citing challenging market conditions for electric vehicles. The move raises questions about near-term EV demand and deals a blow to GM's third-party manufacturing strategy.
The Acura ZDX, which was launched as the brand's first all-electric vehicle, is built on GM's Ultium EV platform at the automaker's Spring Hill, Tennessee, plant. comes amid a broader cooling in the EV market, with several automakers recalibrating their electric vehicle ambitions.
An internal memo from Honda pointed to slower-than-expected EV adoption and the expiration of the as contributing factors. The news comes as Honda is scaling back its investments in battery electric vehicles to focus on hybrid cars, which have seen a resurgence in popularity.
The production halt is a setback for GM, which had touted its Ultium platform as a flexible architecture that could be used by other automakers. While the direct financial impact on GM from the Acura ZDX discontinuation is not expected to be significant, it highlights the challenges facing the EV market and the Detroit automaker's strategy of supplying its technology to other companies.
Despite the news, some analysts remain bullish on GM's prospects. UBS recently upgraded GM shares to 'Buy' from 'Neutral', citing the company's strong North American margins. However, the broader market is seeing a shift in EV buying patterns, with consumers favoring SUVs and crossover SUVs. , a luxury crossover, suggests that even this popular segment may not be immune to the current EV market headwinds.