Honda, Nissan Explore Potential Partnership for Electric Vehicles- Report

Mar 15, 2024 09:47 PM EDT

WHITE SPORTS CAR ON THE ROAD HONDA — (Photo : PEXELS/Supreet)

CEOs of Nissan Motor and Honda Motor, Makoto Uchida and Toshihiro Mibe, recently announced that they would be forming a novel alliance with the goal of exploring the electric car market. The two well-known Japanese automakers have formed a strategic collaboration that indicates a determined attempt to negotiate the very competitive EV market, especially in China and the United States.

Honda, Nissan Talk Over Possible Collaboration

The collaboration comes as both companies grapple with the formidable challenges posed by the burgeoning electric vehicle market, where the convergence of intense competition and the substantial expenses associated with new vehicle launches compel even traditional rivals to seek mutual ground for advancement.

As reported by Reuters, Honda President Toshihiro Mibe stated that the two businesses have formally declared their intention to investigate possible cooperation. Through a non-binding Memorandum of Understanding, they will do this.

There is still plenty to learn about Honda and Nissan's partnership, indicating that their future collaboration is open-ended. Makoto Uchida stressed that both businesses are eager to work together on projects in several areas.

Moreover, Uchida declared that Nissan's current alliances with Renault and Mitsubishi Motors are unaffected by any future cooperation between Nissan and Honda. This emphasizes the independence and strategic goal of Honda and Nissan's proposed collaboration.

In their collaborative efforts, the companies intend to investigate strategies for reducing costs, as emphasized by Honda's Mibe, who highlighted the imperative of scaling up production levels to achieve enhanced cost-effectiveness. Honda has established aggressive goals, seeking to shift to a sales portfolio that consists entirely of fuel cell and electric vehicles by 2040.

Thus, demonstrating the proactive approach that both Nissan and Honda are taking toward environmentally friendly mobility solutions. Although there haven't been any explicit talks about a capital tie-up, Mibe said that both businesses are still open to exploring this option down the road as their partnership develops.

More About This Partnership

Seeking Alpha shared Tokyo TV's report, there are plans for a collaboration between Nissan and Honda in the realm of electric vehicles (EVs), encompassing technology, development, production, and parts sourcing. This strategic partnership aims to facilitate a more streamlined management approach for Nissan, allowing for shared development costs in the EV space.

As they embark on this creative business together, Honda aims to benefit from mutually advantageous technology synergies with Nissan. In an extremely competitive industry with major competitors like Tesla and China's BYD, Nissan and Honda must each find a way to make a name for themselves in the ever changing electric vehicle space.
Nissan has encountered difficulties growing its line of electric vehicles (EVs), while being acknowledged as an early proponent of EVs-most notably with its groundbreaking Leaf hatchback. It's a battle similar to many long-standing manufacturers facing the quick innovations of up-and-coming EV firms.

According to a report by Quartz, there are indications that both Honda and Nissan are contemplating reducing their automobile production in China, a decision influenced by the rising preference for local electric vehicle manufacturers and a shift in global demand away from traditional combustion engine vehicles.

This trend is further exemplified by the complete withdrawal of operations by another longstanding Japanese automaker, Mitsubishi Motors, from the Chinese market. Although there are no explicit statements regarding the cessation of collaboration with current partners.

It's noteworthy that Nissan currently engages in EV partnerships with Renault, predominantly in Europe, despite scaling back aspects of their long-standing alliance in the previous year. Additionally, Nissan also maintains collaborative ventures with Mitsubishi.