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Automakers Join Forces to Boost EV Development

March 25, 2024
Nissan and Honda will work together to develop electric vehicles and auto intelligence technology.

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As the “electrification” trend continues, and as automakers come up with new, non-combustible engine options, two of Japan’s largest automakers have announced a new partnership. According to AP, Nissan and Honda will soon begin working together to develop electric vehicles (EVs) and auto intelligence technology.

In January, Honda announced plans to launch a new electric vehicle series. The automaker recently unveiled its new "Honda 0 Series” and aims to roll out the first models of its new series by 2026, according to Reuters. Nissan’s current EV lineup includes the TAMA, Hypermini, LEAF and ARIYA models.

Now, the two manufacturers will pool their strengths in the EV sector. The agreement details are still being worked out, AP reports, but so far the companies have said they plan to develop core technologies together, but keep their products different.

Speed is Crucial

In an announcement about the new partnership, Nissan Chief Executive Makoto Uchida stressed that speed is crucial for the companies in developing technological solutions. “We don’t have time,” he said. “It is significant that we have reached this agreement based on a mutual understanding that Honda and Nissan face common challenges.”

Honda President Toshihiro Mibe said the companies share common values and could create “synergies” in facing their formidable rivals, AP reports. It says Toyota is expected to “aggressively deliver” on an EV push in coming years and that Nissan is “relatively ahead in EVs among Japanese automakers because it was among the first to come out with an EV with its Leaf, which went on sale in late-2010.”

Playing Catch-up

In “Honda and Nissan Look to Tie Up in EVs to Compete With China, U.S. Rivals,” River Davis says. The two automakers have faced pressure from Japanese officials to work more closely together to achieve economies of scale. “After long shrugging off such pressure, they are now more receptive under the stress of the huge investments they each need to make in EVs,” Davis writes.

Last year, Nissan sold 20,616 EVs in the U.S., compared with 654,888 for Tesla. Honda doesn’t currently offer a fully electric model in the U.S. “Automakers from General Motors to Volvo are struggling to create profitable EV businesses, and Japanese brands including Honda and Nissan have been slower than others to build out their EV lineups,” David continues. “Legacy automakers are far behind rivals including Tesla and China’s BYD when it comes to cost competitiveness.”

An Uphill Climb Ahead

Financial Times says Honda and Nissan currently face a “common threat” from Chinese rivals that have been producing affordable EVs for Japanese consumers since 2022. “In the past year, the potential for disruption has grown with makers such as BYD expanding rapidly,” the publication reports. “It is on track for more than 100 dealerships in the country by next year.” 

The new collaboration could also help the automakers cut costs, with the potential to share spending on developing software and batteries and possibly even sharing a common powertrain, Financial Times predicts. For now, Japanese automakers still have a stranglehold on the local market, with a combined share of more than 90 percent,” it adds. “The sales share of battery EVs in Japan is slim at about 2 percent last year.”

About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.

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