Nissan Motor and Honda Motor are exploring a strategic partnership to work on electric vehicles as the Japanese automakers face increasingly tough EV competition in China and the U.S.
The companies said on Friday (Mar. 15) that they would study the benefits of collaborating on developing “core components” related to EVs like batteries, automotive software platforms, and other “complementary” products.
“Our study criteria will be whether the synergy of the technologies and knowledge that our companies have cultivated will enable us to become industry leaders by creating new value for the automotive industry,” Honda CEO Toshihiro Mibe said in a statement.
The potential partnership between Japan’s second and third-largest automakers develops economies of scale in EV production; the two face heavy competition in a crowded market that includes Tesla and China’s BYD. Nissan, an EV pioneer who was early to the market with its Leaf electric hatchback, has struggled to build out its lineup compared to the more agile startups, as have many legacy automakers.
“Emerging players are very aggressive and are making inroads at incredible speed,” Nissan CEO Makoto Uchida told reporters in a press briefing Friday. “We cannot win the competition as long as we stick to conventional wisdom and a traditional approach.”
China’s looming shadow
Both Honda and Nissan are reportedly planning to slash their auto production in China as local EV makers surge in popularity and the global demand for electric offerings begins to wane. Another legacy Japanese automaker, Mitsubishi Motors, has pulled all operations in China.
The two automakers haven’t said they’ll stop collaborating with their existing partners. Nissan already works with Renault on EVs, primarily in Europe, although it reduce the scope of the years-long alliance last year. Nissan also collaborates with Mitsubishi.
The companies also have not ruled out the possibility of taking stake in each other and will explore areas of cutting costs, Mibe told reporters.