General Motors and Honda created a bit of excitement last week announcing their plans to “explore sharing vehicle platforms and propulsion systems.” The two companies announced that they had signed a non-binding memorandum of understanding in hopes of creating a North American alliance to mutually develop new vehicles along with other cooperative activities.

The goal of the MoU is to initiate collaboration in North America and share common vehicle platforms (including electrified and internal combustion propulsion systems). Co-development planning discussions will begin immediately, with engineering work beginning in early 2021, the companies announced.

The creation of the GM-Honda pact is hardly a surprise given Honda’s announced intention to adopt and deploy GM’s Super Cruise (Level 2+ semi-autonomous system) and OnStar connectivity technology. Honda has also committed to support GM’s Cruise Automation robotaxi development activities to the tune of $2.75B over 10 years.

Both GM and Honda have been lagging behind global competitors in the race to bring electric vehicles to the market. Honda, in particular, has struggled to clarify its car connectivity strategy while also failing to define its vision for automated driving.

Toyota and Nissan have also struggled with connectivity and automation, but both companies have their own in-house Level 2+ solutions intended to compete with Super Cruise. Toyota and Nissan are also further along in EV development.

Honda may have seen a tie up with GM as the only way to catch up in a rapidly evolving, high cost development race. GM, too, will welcome the added financial and research and development assistance.

There’s just one or two flies in the collaboration ointment. General Motors and American Honda are at odds over future fuel economy standards and regulations in the U.S.

GM has inexplicably sided with the Trump Administration, joining the so-called “Coalition for Sustainable Automotive Regulation” and backing looser fuel economy regulations. In addition to GM, Toyota, FCA, Nissan, Hyundai, Kia, Isuzu, Maserati, McLaren, Aston Martin and Ferrari also joined this coalition. BMW, Volkswagen, Ford and Honda have formed a pact siding with California, pledging to up their fleetwide fuel economy averages to a level closer to the previous standard, according to the Automotive News..

The Automotive News reports that President Donald Trump has proposed lowering the required annual fleetwide average fuel economy rating for cars and trucks, from 46.7 mpg by 2025 to 40.4 mpg by 2026. In response, California set its own future fuel economy requirements separate from the federal standard. The Trump Administration then sought to revoke a waiver that would allow the state to set its own fuel economy regulations leading California to sue the administration.

It will be interesting to see how Honda squares this circle – or GM for that matter. A still more complex challenge remains in rationalizing the two autonomous vehicle development tracks already underway at GM.

GM’s Cruise Automation is working toward the launch of its Origin Level 5 shared mobility shuttle with no steering wheel or brake or accelerator pedals – suited to operate solely in an urban setting. At the same time, GM is bringing Super Cruise to 29 additional vehicles in the next year or two with plans to evolve this platform toward Level 4 operation.

Honda has invested in Cruise Automation and committed to introducing Super Cruise on Honda vehicles. This means that Honda has bought into GM’s vision of autonomy which remains something of a roll of the dice. Kyle Vogt’s Origin shuttle is being developed on the assumption that consumers will prefer driverless shared shuttles to individually driven taxis, Ubers, or Lyfts. And Super Cruise remains an expensive option with a relatively low take rate – though those that do take it appear to love it, according to GM.

Both GM and Honda have massive research and development efforts in multiple locations around the world. It remains to be seen how Honda – a creator of robots, motorcycles, airplanes, scooters, lawn mowers, and generators – will find common cause with GM. While the two companies are largely confined geographically to North America (with Honda deriving 50% of its sales from Japan), a cooperation with Honda might give GM access to popular sedans – a segment the company has abandoned. Similarly, Honda might tap into GM’s SUV-crossover-pickup-heavy portfolio.

The GM-Honda MoU is expected to give a major boost to the prospects for GM’s recently announced Ultium EV platform. So it was an unfortunate coincidence that an activist group – “Moms Clean Air Force” – this week released a petition opposing GM’s support for the Trump Administration’s fuel economy rollback.

A letter from the organization released Friday, stated:

“We need your companies (GM et. al.), which represent critical manufacturing jobs and technological leadership for the U.S., to focus on restoring strong national clean cars standards and state authority to limit tailpipe emissions, For decades, these public health and climate protections helped clean up air pollution from coast to coast, while supporting the development of the safest, most efficient vehicles American families have ever known.”

The letter was reportedly sent to GM CEO Mary Barra, FCA CEO Mike Manley, and Toyota CEO James Lentz. GM has not yet publicly responded to the petition, nor have FCA or Toyota. Honda is not on board with a regulatory rollback. GM and Honda should get on the same page if they intend to be leaders in EV development and deployment.

More than a policy alignment between GM and Honda, though, both companies would be better served by embracing Democratic presidential candidate Joe Biden’s platform. To wit: “Eleven years ago, Joe Biden helped save the auto industry. Today, the industry once again faces a crisis. Not only has Trump overseen a manufacturing recession on his watch, but through neglect and failed trade policies, he has allowed China to race ahead in the competition to lead the auto industry of the future. China is on track to command more than four times the global market share compared to the U.S. in electric vehicle innovation.

“As called for in his Plan to Ensure the Future is Made in All of America by America’s Workers, Biden will use all the levers of the federal government, from purchasing power, R&D, tax, trade, and investment policies to reverse this trend and position America to be the global leader in the manufacture of electric vehicles and their input materials and parts.”