Nissan and Honda team up

Two marques have joined forces to work together on electric vehicle (EV) technology as carmakers in Japan attempt to gain ground on Chinese competitors.

Honda and Nissan, the country’s second and third-largest carmakers respectively, aim to cut costs by combining resources on the likes of components and software.

Traditional manufacturers are struggling to compete profitably with upstart rivals as the EV sector grows rapidly, adding significant development costs.

China’s BYD and Li Auto have gained market share in a competitive industry, alongside Elon Musk’s Tesla. Earlier this year, BYD overtook Tesla as the world’s top-selling maker of electric cars.

Nissan was an early mover in EVs with its Leaf, pictured, but has struggled to keep up with Chinese manufacturers that are able to access cheaper raw materials and labour, as well as greater scale and potential customers.

Nissan chief executive’s Makoto Uchida says: “Emerging players are aggressive and making inroads at incredible speed. We cannot win the competition if we stick to conventional wisdom and a traditional approach.”

Toshihiro Mibe, Honda’s president, adds: “We are strapped for time and need to be speedy. In 2030, to be in a good position we need a decision now.

“The rise of emerging players is becoming faster and stronger. Companies that cannot respond to the changes will be wiped out.”

Honda and Nissan each sell more than three million cars globally, and the partnership is expected across operations in Japan and overseas.

The memorandum of understanding between the companies is non-binding and involves no capital. 

Last year, Nissan moved to rebalance its partnership with Renault as the French company reduced its stake in its Japanese counterpart to 43 per cent and Nissan increased voting rights linked to its 15 per cent holding in its partner company.

Renault used the proceeds to invest in its own EV unit, Ampere. Uchida has previously said that Ampere is viewed as “an enabler for Nissan to participate in new opportunities in Europe”.

They loosened their two-decade-long alliance after a corporate scandal involving former Nissan boss Carlos Ghosn.

Although EVs are an established part of the market, carmakers and suppliers are still racing to develop the next generation of technology, including solid-state batteries that have been touted as a way to improve safety and range.