Acura Says "The Worst Is Behind Us" and Preps for All-Electric Future

• Second-generation ZDX will be the brand's first all-electric SUV.
• Recently unveiled Precision EV concept previews ZDX design.
• Honda executive Dave Gardner says he is hopeful "the worst is behind us" as the brand addresses inventory shortages.

Though Acura has been quite late to the EV game, Honda's luxury arm is finally beginning to see the light. On August 17, Acura unveiled not only the newly hybrid-powered ARX-06 prototype race car, it also announced the automaker's first fully electric vehicle, the ZDX, due in 2024. With these reveals, Acura is on track with Honda's overall plan for 100 percent of North American sales to be battery electric and hydrogen fuel cell vehicles by 2040.

The return of the ZDX

If you're scratching your head right now and wondering where you've heard the ZDX grouping of letters before, it's because Acura had previously used that moniker for a coupe-like SUV. For model years 2010-2013, the ZDX was similar to the BMW X6 and Mercedes-Benz GLE Coupe — all midsize crossovers with a swept roofline for a more distinctive aesthetic. Unfortunately, the ZDX didn't enjoy the sales success of its peers; Acura moved only 6,174 units in the U.S. during that time period. The Japanese automaker is trying again with a battery electric version and we think it has a better chance of succeeding than the gas-powered version.

This time around, Honda is partnering with General Motors on Acura's behalf to have GM's Ultium battery platform underpin the ZDX. Starting in 2026, Acura will launch additional EVs based on its own global e:Architecture platform and will presumably wean itself from the GM ties.

The recently unveiled Precision EV concept vehicle is essentially a preview of what the ZDX will look like. Acura says some design elements are inspired by luxury Italian power boats, and the look of the striking front face mimics the diamond shapes of the current MDX. LED light patterns replace the metal cutouts of the previous generation. Displayed in a luminescent Double Apex Blue that looks both flat and shiny simultaneously, the show car's reflective surfaces set off the light show up front.

Moving toward EV totality

The executive vice president of Business and Sales for American Honda, Dave Gardner, sat down with Edmunds during Monterey Car Week to talk about the company's electrification goals, lofty recycling plans, and new business opportunities to stay competitive. Gardner has quite a juggling act on his hands as Acura plunges into the EV vortex, wasting no more time on hybrid powertrains.

Other luxury brands are moving quickly into the BEV space, he says, to compete with the EV culture Tesla has defined. Whether or not Tesla is really a luxury brand may be up for discussion, but its appeal to the EV-curious is not. Battery-powered vehicles are more costly to build in the current market, and Acura's luxury pricing model works well for profits in the hot all-electric segment.

"When we looked at our business, it just made sense to us that Acura should move toward BEV much quicker than Honda will," Gardner said. "Sales of the MDX have proven to us that the right product with the right mindset will give us the margin to move to BEVs."

Not every customer or every dealer is going to get on board right away, of course, but Acura is barreling forward and planning for one-to-one cost parity for BEVs versus internal-combustion vehicles. Jay Joseph, vice president of American Honda's CASE & Energy business unit, oversees Acura's Connected, Automated, Shared, Electrified (CASE) and new energy business in the U.S. Joseph said that, ideally, the brand will do even better, offering EVs for lower prices than gas-powered vehicles in the future.

"We believe change is an opportunity for those who recognize the benefits that change affords," Joseph said.

Subscription services ahead?

When asked about the current subscription-based trend for features, Gardner said Acura is paying attention to the market. As he watches what is unfolding, he's learning from it and taking notes. Customers, he said, object to owning a vehicle with all the bells and whistles already installed but are then held hostage to a subscription service. Never say never, and Gardner didn't rule it out entirely. 

"I don't think subscriptions are the way to go," he said at a media event last week. "We're looking at other ways to approach this."

Joseph also agreed that a subscription service is risky for long-term customer satisfaction. "From a customer perspective, if they buy a car with hardware already installed, they might think, 'How dare you charge me for what's already installed?'" he said.

Financially, it doesn't make sense for Acura or any automaker to build its entire lineup with top-grade amenities and only turn some of them on as requested. Then again, he noted the second or third owner of the vehicle may require different features. As that relates to digital privacy when the car changes hands, Acura is working on a policy to ensure the safety of personal data.

"We're hopeful that the worst is behind us"

Acura is facing the same supply chain issues and chip shortages as its competitors. The overall pipeline is narrow, and the company is adjusting its expectations.

"I joined American Honda in May of 2020, and between our Honda and Acura brands, we had roughly 400,000 vehicles in dealer inventory," Gardner told Automotive News in April. "Today we're sitting with about 25,000."

This month, the inventory number is down to 20,000, Garner said. In terms of vehicles on hand, he's hopeful the worst is in the rearview mirror and he's realistic about getting the company back to full health as the industry rebounds. As Joseph discussed resource circularity (using materials that require zero extractions from the earth), the emergence of solid-state batteries, and new business opportunities for recycling and energy, he sees there's more work to be done.

"The antidote to range anxiety is not bigger batteries," Joseph said. "It's access to reliable charging. The experience we have today is not the one we need going forward."

Both executives see a role for local and state governments to advance infrastructure development and incentives to get customers to choose electric. In the meantime, Acura is punching above its weight and pushing for zero emissions and zero fatalities as well.

Edmunds says

Acura has embraced electrification slower than most other luxury marques, but its first EV — the second-generation ZDX — is a step in the right direction.