Honda, Nissan to collaborate on electric vehicles, EV batteries and software

Honda Motor Co. and Nissan Motor Co. agreed to collaborate on software, batteries and other EV-related technologies to save on costs and better compete in the future and in areas like China, where they are seeing slumping sales.

Mitsubishi Motors Corp. will join a broader strategic partnership with the two carmakers, which have been edging closer to each other in recent months. They will see out synergies as well as “new business opportunities," they said in a statement Thursday.

The partnership, aimed at sharing costs through joint development, pits the trio against Toyota Motor Corp., which has built its own consortium via stakes in Subaru Corp., Suzuki Motor Corp. and Mazda Motor Corp. Nissan’s decision to forge a closer relationship follows its decision in early 2023 to overhaul its alliance with Renault SA, which was dealt a mortal blow by the 2018 arrest of former Chairman Carlos Ghosn.

“Honda and Nissan have been struggling in China and they will have to make more EVs to be able to stay there," said Tatsuo Yoshida, senior auto analyst at Bloomberg Intelligence. The alliance, therefore, “makes sense."

Japanese automakers have been losing share in China due to the popularity of electric vehicles made by BYD Co. and others, which have taken over the premium segment of the market. In June alone, Honda and Nissan sales fell about 40% and 27%, respectively, in China following the shutdown of some of their local plants. Last week, Honda decided to cut production of gasoline cars by 19% in the market. Mitsubishi Motors exited the China last year.

In total, Honda, Nissan and Mitsubishi sold about 4 million units globally in the first six months through June, compared with 5.2 million units by Toyota alone.

The new partnership between Honda and Nissan, the latest step after announcing initial discussions in March, will provide them with an opportunity to use each other’s strengths, including various powertrain options. It will also help in defraying the huge costs to navigate the broader trend toward electrification and automation.

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