Nissan and Honda Explore Strategic Partnership to Strengthen EV Presence

In a bid to enhance a foothold in the competitive electric vehicle (EV) market, Japanese automotive giants Nissan Motor Co. and Honda Motor Co. are considering a strategic partnership focused on standard automotive software and bolstering EV charging infrastructure, according to a report by the Nikkei newspaper.

The two companies, which rank as Japan's third and second-largest automakers respectively, are exploring collaboration opportunities to reduce costs and increase competitiveness against global rivals. This potential partnership could lead to the joint development of an operating system that would manage vehicle functions, significantly lowering production expenses.

Nissan and Honda had previously announced in March their intentions to explore a strategic alliance aimed at producing EV components. This move comes amid escalating competition in the global EV market, driven by the increasing prominence of industry leaders like Tesla and emerging contenders from China and South Korea.

The Nikkei report suggests that Nissan and Honda may cooperate in up to six areas, including enhancing EV charging infrastructure. Such a collaboration could extend beyond Japan, with both automakers open to working together in international markets.

Makoto Uchida, CEO of Nissan, indicated in March that the companies were considering a broad range of cooperative efforts, although specific details remain undisclosed. Both Nissan and Honda have so far refrained from commenting directly on the Nikkei report but acknowledged ongoing discussions about various collaborative ventures.

Nissan, which launched the mass-market EV revolution with its Leaf model in 2010, and Honda, are facing significant challenges in maintaining market share, particularly in China. Chinese consumers' preference for affordable, feature-rich EVs from domestic brands like BYD has impacted the Japanese automakers' sales.

From January to May 2024, Nissan reported global EV sales of just over 50,000 units, representing 3.5 per cent of its total sales of 1.4 million vehicles. Honda's EV sales were even more modest, with only 3,190 units sold in the first quarter of 2024, constituting a mere 0.3 per cent of its nearly 1 million total vehicle sales in that period.

This potential partnership between Nissan and Honda highlights the growing need for traditional automakers to adapt and innovate amidst the rapidly evolving automotive landscape. By joining forces, both hope to leverage shared expertise and resources to better compete in the expanding EV market.