General Motors and Honda Motor have announced a partnership to develop and manufacture more affordable electric vehicles that will cost below $30,000, reports CNBC.

The partnership will rely on GM’s Ultium battery technology, a next-generation battery that is made for level two and DC fast charging and will revolutionize EVs with its drastically reduced manufacturing costs. The expectation is that the two companies together will produce millions of EVs at lower price points than offered by the current market, including compact crossover vehicles that will begin rolling out in 2027.

“GM and Honda will share our best technology, design and manufacturing strategies to deliver affordable and desirable EVs on a global scale, including our key markets in North America, South America and China,” said GM CEO and chair Mary Barra in a statement.

The executive vice president of electric, autonomous, and fuel cell programs at GM, Ken Morris, told reporters on a call on Tuesday that the vehicles produced from this partnership should have price points below $30,000, opening up the potential for access to EVs to a broader percentage of the population. While there is growing interest in EVs across the globe, the higher entry prices continue to be a barrier for many.

“Honda and GM will build on our successful technology collaboration to help achieve a dramatic expansion in the sales of electric vehicles,” said Toshihiro Mibe, Honda president and CEO, in a statement.

GM and Honda are both developing next-generation battery technologies, including the Ultium battery on GM’s side and solid-state batteries for both companies. The potentials of solid-state batteries are that they are able to provide the same amount of power with less required space, they are lighter, and they give the potential for greater range on a single charge than current batteries provide.

The two companies are no stranger to collaboration; current partnerships include GM’s production of two EVs for Honda for 2024 and Honda’s $750 million investment in Cruise, the autonomous vehicle portion of business that is majority-owned by GM.

Investing in GM and EVs With KARS

GM has said that it will be able to produce and sell 2 million EVs worldwide by 2025. Investors who are looking to capture the transition to EVs should consider the KraneShares Electric Vehicles and Future Mobility ETF (NYSE: KARS).

KARS invests in many familiar car companies such as Tesla, Ford, Mercedes-Benz, GM, BMW, and others, as well as major Chinese EV manufacturers such as Xpeng, Nio, and BYD, some of the biggest companies in the global electric vehicle industry.

KARS measures the performance of the Bloomberg Electric Vehicles Index, which tracks the industry holistically, including exposure to electric vehicle manufacturers, electric vehicle components, batteries, hydrogen fuel cells, and the raw materials utilized in the synthesis of producing parts for electric vehicles.

The index has strict qualification criteria. Companies must be part of the Bloomberg World Equity Aggregate Index, have a minimum free-float market cap of $500 million, and have a 90-day average daily traded value of $5 million.

General Motors (GM) is carried at a 4.46% weight within the fund.

The ETF has an expense ratio of 0.70%.

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