Japanese legacy automakers Nissan and Honda are eyeing a potential partnership to develop lower-cost electric vehicle models to stay competitive against Chinese rivals like BYD.
Potential partnership
The prospective partnership between Nissan and Honda could cover “joint procurement and development” of electric vehicles, Nikkei Asia reports, citing “sources at Nissan.”
Simply put, Nissan is considering the idea of jointly procuring some parts and sharing critical components with Honda to reduce their EV production costs. They can also jointly develop a shared EV platform.
Negotiations between the two Japanese auto giants remain in the early stages, as per the sources.
Weak position
Japanese automakers like Nissan, Honda, and Toyota have lagged behind their competitors in adopting electric vehicles.
For instance, BYD’s growing dominance in China and beyond weakened these Japanese brands’ position in the world’s largest auto market and also left them vulnerable on their home turf.
In effect, Honda and Nissan are planning to lower production output in the Chinese market as their sales drop. In contrast, BYD recently announced plans to launch new EVs and add new dealerships to its sales network in Japan.
EV push
Nissan and Honda have been boosting their electrification push in the past few years to catch up in the electric vehicle industry, especially with leaders like Tesla and BYD.
Nissan has been expanding its EV partnership with Renault and Mitsubishi Motors, according to Reuters. The next Nissan Micra EV will apparently use the same platform as the new Renault Five and undergo production in the same factory in northern France. The Japanese automaker also pledged to invest a maximum €600 million ($656.64 million) in Renault’s EV unit, Ampere.
Meanwhile, Honda abandoned its plans to develop cheaper EVs with General Motors due to the “changing business environment.”
Nissan and Honda lost substantial market share in China in 2023 amid the strong dominance of BYD and Tesla. Therefore, the potential partnership between Nissan and Honda can significantly help them catch up by launching lower-cost EV models to attract more customers.
