(Yicai Global) June 22 -- Honda Motor’s joint venture with Guangzhou Automobile Group has announced its intention to build a new electric car plant in China, making it the second of the Japanese carmaker’s Chinese JVs to set out such plans this year.

GAC Honda Automobile will invest JPY70 billion (USD513 million) in the new factory, it said in a statement yesterday. The plant, to be built in Guangzhou, will be able to turn out 120,000 cars a year after it is completed by 2024.

Earlier this year, Dongfeng Honda Automobile, a Honda JV with Dongfeng Motor Group, said it will build a factory in Wuhan to produce 120,000 electric vehicles a year.

The capacity expansion plans come after Honda’s had sluggish sales in China last year. They fell nearly 1.6 million, or 4 percent, from 2020, despite sales of all car brands in the country rising 3.8 percent to 26.3 million, according to data from the China Association of Automobile Manufacturers. Honda’s annual production capacity in China is 1.48 million: 770,000 at GAC Honda and 720,000 at Dongfeng Honda.

With China becoming the world’s largest new energy vehicle market, it is inevitable that carmakers accelerate the shift to NEVs from fossil fuel-powered vehicles. Last October, Honda released a new electrification strategy and introduced its new pure EV brand e:N. At the occasion, the company first disclosed plans to build two specialized EV plants in China.

Yesterday, GAC Honda also released a new pure EV, the e:NP1. Priced between CNY175,000 and CNY218,000 (USD26,100 and USD32,500), it has a ternary lithium battery pack jointly developed by Honda and Contemporary Amperex Technology. In April, Dongfeng Honda launched the e:NS1 EV model.

Editors: Tang Shihua, Futura Costaglione