DETROIT/TOKYO— General Motors and Honda announced that the automakers will codevelop a line of affordable electric vehicles, reports the Wall Street Journal.

The companies are working together to enable global production of millions of EVs starting in 2027, including compact crossover vehicles. The compact crossover segment is the largest in the world, with annual volumes of more than 13 million vehicles, according to a release by the companies.

GM and Honda also will discuss future EV battery technology collaboration opportunities. The EVs will be for the North and South American and Chinese markets, and the vehicles are expected to have a sticker price below $30,000. The average price for an EV is $60,000, compared with about $45,000 for all vehicles, according to research website Edmunds.com.

At one point, Tesla said it wanted to offer lower-cost EVs priced at around $25,000, but the project was put on hold, according to CEO Elon Musk. GM said it will roll out an electric Equinox compact SUV that will start at about $30,000 next year.

Splitting the R&D and battery costs will allow the auto manufacturers to sell less expensive EVs and scale up production at a global level, says the companies. Rick Schostek, executive vice president of corporate operations for Honda’s U.S. division, told the Wall Street Journal that the EVs would be built using Honda’s existing factories and workforce, including some output in North America.

The battery needed to power an EV can account for roughly one-third of overall cost.

Morgan Stanley says that pass-through costs of lithium carbonate, a key ingredient in EV batteries, could push EV manufacturers to raise prices by as much as 15% and may hit demand. Chinese prices for lithium carbonate have increased fivefold in price over the past year, possibly leading EV battery makers to increase prices by close to 25%, said Morgan Stanley.

With gasoline at record-high prices, American consumer interest in electric vehicles is increasing. The national average price for a gallon of gasoline is $4.16, according to AAA. (Here’s how to talk to your customers about why gas prices aren’t falling quickly enough.)

In the week that ended March 13, one-quarter of shoppers on Edmunds.com said they would consider buying a hybrid, plug-in hybrid or EV, which is a 39% increase from the previous week and an 84% surge from the same week in February. Another survey found that more than two-thirds of Americans indicated they are nervous about rising fuel prices, and nearly half said EVs could provide a viable alternative to internal combustion engine (ICE) cars.

Within the Edmunds survey, consumers who said they weren’t interested in an EV cited high purchase costs, limited charging infrastructure and the vehicles’ range capacity. However, supply chain snarls, demand and low inventory levels have many new vehicles, including EVs, difficult to obtain. The majority of EVs are already reserved before they hit dealer lots.

Visit the NACS Electric Vehicles topics page for more information about EVs. The NACS EV Charging Calculator was created to allow retailers to assess the cost and profitability of offering EV chargers at their sites. The calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs after allowing for potential ancillary in-store visits and purchase profitability.

Read more about electricity demand charges and what they mean for retailers’ ability to turn a profit from EV charging in the September issue of NACS Magazine.