GM and Honda are working to build electric vehicles that people can actually afford

A $30,000 electric vehicle jointly developed by GM and Honda could hit US streets by 2027.

• Electric cars are much more expensive than gas-fueled ones, but that's changing. 
• GM and Honda announced they're partnering to develop cheap electric cars. 
• The co-developed, "affordable" models will go on sale in North America in 2027.  

Electric cars still cost much more than their gasoline-fueled counterparts, but that may change as automakers around the globe pour resources into developing new vehicles and producing them at scale. 

General Motors and Honda are working to develop a series of "affordable" electric vehicles, the companies announced on Tuesday. The carmakers expect to begin selling millions of the cheaper models — including compact SUVs — starting in 2027. 

GM executives said the partnership would yield a new electric model for North America priced lower than the company's upcoming $30,000 Chevrolet Equinox EV. 

Though years away, the new, lower-priced models could make electric cars a realistic option for buyers who have been priced out of the current EV market. Today, battery-powered models largely fall into the luxury segment. 

The average price paid for a new electric model in February was $60,054, according to Edmunds. The average price paid for any new vehicle, including EVs, was $45,596. Bringing costs down will be key to electric cars going mainstream. According to an Axios poll published on Tuesday, seven in 10 young adults would buy an electric car if they could afford it. 

Tesla, by far the largest producer of electric cars on the planet, promised to start selling a $25,000 vehicle by 2023. But the company said in January that it is not working on the project. 

GM and Honda will use GM's Ultium battery platform and will explore new battery technologies to bring manufacturing costs down. 

"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," Mary Barra, GM's CEO, said in a statement. 

The partnership builds on an existing arrangement between GM and Honda to jointly develop Honda's first major electric models: the Honda Prologue SUV and an Acura model. Those vehicles are set to arrive in 2024.