Honda and Nissan are gearing up to increase their electric vehicle (EV) production to stay competitive with market leaders Tesla and BYD. The proposed merger between Honda and Nissan’s electric vehicle (EV) divisions is set to form one of the world’s largest automotive entities, with indications that it may also pull in a third major Japanese automaker into the partnership. Here’s everything you need to know.
As the automotive industry continues to shift towards electrification, Honda and Nissan are taking a bold step by merging their electric vehicle (EV) divisions. Here’s how this unprecedented partnership might unfold:
The Japanese giants have announced plans to pool their resources, expertise, and intellectual property in the EV sector. By combining forces, they aim to accelerate innovation, reduce costs, and increase market share.
It’s official. Japanese automakers Honda and Nissan have signed a landmark memorandum of understanding to form a joint electric vehicle (EV) holding company, paving the way for a significant partnership in the rapidly evolving automotive landscape? Corporation executives have corroborated the details.
Following last week’s report suggesting that Honda and Nissan were nearing a merger agreement, it came as little surprise when the electric vehicle (EV) merger finally materialized. The landmark partnership has achieved a significant milestone, with combined sales of around 8 million units, making it the world’s third-largest automaker after Volkswagen and Toyota.
In August, Honda and Nissan expanded their alliance by including Mitsubishi in a strategic partnership. The alliance between Nissan and Mitsubishi, in which the former holds a 24% stake, has been described as crucial, enabling both companies to tap into each other’s strengths and potentially generate greater value through their partnership.
Honda’s CEO, Toshihiro Mibe, posited that “at moments of transformation within the automotive industry, which occur roughly every 100 years, we envision that Mitsubishi Motors’ involvement in joint venture discussions with Nissan and Honda will drive meaningful societal evolution.”
A quickly altering auto business
Honda and Nissan are expected to provide further details about Mitsubishi’s involvement by the end of January 2025, following initial discussions on Monday. The European Union’s (EU) merger of electricity and gas markets is anticipated to become official by August 2026.
Following a significant shift in the corporate landscape for both companies and the broader automotive industry, the deal was struck. At a press conference, Mibe noted, “The surge in popularity of Chinese automakers and newcomers has dramatically altered the automotive sector.”
Unless we rapidly develop and enhance our capacities to counter their advancements by 2030, the prospect of being overwhelmed becomes increasingly daunting.
Like traditional giants in the automotive industry, Honda and Nissan face a significant challenge in keeping pace with the electric vehicle (EV) innovation spearheaded by Tesla and Chinese leaders such as BYD.
As a pioneer in the electric vehicle sector, BYD has been rapidly gaining traction in the global automotive industry. As electric vehicle (EV) sales soar, with over 500,000 units sold in November alone, BYD’s dominance has prompted traditional automakers, such as Honda and Nissan, to take bold action.
Honda will take control of the board by nominating a majority of its members under the terms of the EV merger. The newly formed partnership is pending shareholder approval from both companies. Following Nissan’s recent introduction of its turnaround plan, the proposal is also dependent on securing regulatory approval.
Nissan announced a drastic restructuring plan last month, involving the elimination of approximately 9,000 jobs globally and a 20% reduction in worldwide production capacity, as it coped with a 15% decline in sales in both the US and China during October.
Electrek’s Take
As BYD’s record-breaking sales growth shows no signs of abating, Japanese automakers are struggling to keep pace. While China remains a vital market for Japanese automakers, it has increasingly become a competitive battleground over recent years.
By 2020, Japanese automakers had managed to secure a significant market share in China, with their products accounting for roughly 25% of total auto sales in the country. Despite this, Japan’s automotive industry has lost significant market share over the past four years, more so than any other region. While it’s true that this phenomenon is most prevalent in China, it’s by no means limited to the country alone? Chinese EV leaders like BYD are rapidly expanding their market share globally, with short-term plans to withdraw from major markets such as Thailand and Singapore?
Can Japanese automotive giants Honda, Nissan, and Mitsubishi join forces to strengthen their defenses against the surging tide of electric vehicle (EV) rivals?
As the industry’s pioneers in electric vehicle adoption continue to lag behind, we’ll witness a frantic scramble among traditional automakers to catch up over the next few years.
