"Nissan and Honda Consider Collaboration on Electric Vehicles"

Japanese automakers Nissan and Honda are reportedly considering collaboration on electric vehicles, according to the Nihon Keizai Shimbun on the 14th.

[Image source=EPA Yonhap News]

According to the report, multiple Nissan officials confirmed that they are reviewing cooperation with Honda, focusing on key components used in electric vehicles. Specifically, they are discussing jointly procuring key parts or co-developing vehicle bodies to reduce production costs. There is also a possibility that Honda may join the kei car electric vehicle development project currently underway between Nissan and Mitsubishi Motors.

This collaboration comes amid accelerating global competition in electric vehicles and growing concerns over demand slowdown. Price competition is intensifying, especially among Chinese brands with strengths in battery procurement. Chinese brands such as BYD and Xiaomi, which emphasize low prices, have also declared their full-scale entry into the global market.

In this context, both Nissan and Honda appear to have determined that they must enhance cost competitiveness through collaboration. However, these discussions are still in the early stages. If successful, it would be an alliance between Japan's second and third largest automakers, but the Nihon Keizai Shimbun pointed out that considering Nissan's financial capacity, it is uncertain whether the negotiations will proceed smoothly. Nissan is said to have intentions to expand partnerships later in North America, Southeast Asia, and other regions, starting with collaboration on electric vehicle business within Japan.

The newspaper assessed, "Japan leads in hybrid vehicles but still lags in electric vehicles," adding, "It is necessary to respond to market structural changes to secure competitiveness." Looking at the electric vehicle market share by country brands in 2022, China accounted for 30%, while Japan remained below 2%. According to S&P 500, due to the transition to electric vehicles, the share of Japanese cars worldwide is estimated to decline from around 30% in 2020 to below 26% by 2030.