Honda and Nissan reportedly discuss a merger to strengthen EV competitiveness

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Jack Aylmer Energy Correspondent

By Jack Aylmer (Energy Correspondent), Bast Bramhall (Video Editor), Mohammed Ali (Senior Motion Designer)

A pair of Japan’s largest automakers, Honda and Nissan, are in talks to form a partnership to boost their competitiveness in the electric vehicle (EV) sector. The companies have reportedly signed a memorandum of understanding outlining plans to split equity into a new holding company from which both will do business.

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A key objective of the potential merger is to help Honda and Nissan challenge EV market leaders such as Tesla and BYD. Mitsubishi has also been invited to join this collaboration after being asked to take part in Honda and Nissan’s earlier efforts to jointly develop EV technology.

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Nissan, in particular, hinges heavily on the success of this deal. Analysts suggest the company faces significant financial struggles. They say Nissan may only remain viable for one more year unless another entity, such as Honda, acquires its shares. According to Reuters, Nissan’s mid-2024 net earnings fell over 90% year over year. That led to a 70% reduction in its annual operating profit forecast.

The talks are critical for Japan’s automotive industry, which has fallen behind China in the EV transition. Japanese automakers are now losing market share in key regions, including Southeast Asia, where Chinese manufacturers are increasingly dominant.

Tags: BYD, China, Climate Change, Electric vehicles, Electricity, Honda, Japan, Mitsubishi, Nissan, Tesla

[Jack Aylmer]

TWO OF JAPAN’S BIGGEST AUTOMAKERS ARE TEAMING UP TO BECOME MORE COMPETITIVE IN THE EV SECTOR.

HONDA AND NISSAN ARE CURRENTLY IN TALKS TO MERGE-

WITH THE TWO COMPANIES HAVING REPORTEDLY SIGNED A MEMORANDUM OF UNDERSANDING-

OUTLING THEIR PLANS TO SPLIT EQUITY INTO A NEW HOLDING COMPANY FROM WHICH BOTH WILL DO BUSINESS.

A CHIEF GOAL OF THIS PROPOSED PARTNERSHIP WOULD BE TO ENABLE HONDA AND NISSAN TO BETTER CHALLENGE LEADING EV MANUFACTURERS LIKE TESLA AND BYD.

MITSUBISHI IS ALSO SAID TO HAVE BEEN INVITED TO JOIN THIS COLLABORATION-

HAVING ALSO PREVIOUSLY BEEN ASKED TO JOIN HONDA AND NISSAN’S EARLIER EFFORTS TO JOINTLY DEVELOP EV TECHNOLOGY.

MEANWHILE, NISSAN MAY HAVE THE MOST TO GAIN FROM THIS DEAL.

THE AUTOMAKER’S CURRENT FINANCIAL OUTLOOK IS BELIEVED TO BE SO DISMAL THAT IT WILL ONLY SURVIVE FOR ANOTHER YEAR UNLESS A COMPANY-

LIKE HONDA-

BUYS UP ITS SHARES.

ACCORDING TO REUTERS, NISSAN’S MID-2024 NET EARNINGS DROPPED MORE THAN 90 PERCENT YEAR-OVER-YEAR-

PROMPTING A 70 PERCENT REDUCTION IN ITS ANNUAL OPERATING PROFIT FORECAST.

THIS POTENTIAL MERGER COMES AT A PIVOTAL TIME FOR JAPAN’S AUTOMOTIVE INDUSTRY-

WHICH HAS LAGGED BEHIND CHINA IN THE EV TRANSITION.

AS A RESULT, JAPANESE CAR MAKERS ARE NOW LOSING MARKET SHARE IN KEY REGIONS, INCLUDING EAST AND SOUTHEAST ASIA, WHERE CHINESE MANUFACTURERS ARE DOMINATING.

TO GET MORE STORIES ABOUT HOW AUTOMAKERS AROUND THE WORLD ARE NAVIGATING THE EV SECTOR, DOWNLOAD THE STRAIGHT ARROW NEWS APP AND SIGN UP FOR ALERTS FROM ME- JACK AYLMER.