GAC Honda Automobile (广汽本田), a joint venture between Honda China and Guangzhou Automobile Group, announced plans on June 21 to build an electric vehicle factory in Guangzhou, according to a Yicai report.

The joint venture company will invest JPY70 billion ($513 million) to build an EV plant with an annual capacity of 120,000 units. The plant will be completed by 2024, Honda said in its statement.

Earlier this year, Dongfeng Honda Automobile, a JV between Honda China and Dongfeng Motor Group, announced it will build a factory to produce 120,000 EVs a year in central China’s Wuhan City.

The report said that Honda’s latest EV capacity expansion plans in China come after sluggish sales in 2021. Last year, Honda China’s sales fell by nearly 1.6 million units, or 4%, from the previous year, despite the country’s total car sales rising 3.8% to 26.3 million units, according to data from the China Association of Automobile Manufacturers.

With China becoming the world’s largest new energy vehicle market, it is inevitable for carmakers to accelerate the transformation to NEV from fuel vehicles.

Honda released a new electrification strategy and introduced its new pure EV brand ‘e:N.’ in October last year. On this occasion, the company first disclosed the plan to build two specialized EV plants in China.

GAC Honda also released the new pure EV e:NP1 on June 21. Priced between RMB175,000 and RMB218,000 ($26,100 and $32,500), the new model is equipped with a ternary lithium battery pack jointly developed by Honda and CATL. In April, Dongfeng Honda launched the e:NS1 EV model, Yicai reported.