Honda and Nissan to collaborate on EVs

HONDA and Nissan are seeking to collaborate on electric vehicles, common parts and joint procurement in a bid to take on the likes of Tesla and Chinese EV rivals.

The news comes just weeks after Honda and General Motors announced that it would dissolve its EV partnership, saying a cost-effective structure could not be found in producing vehicles together.

Announcing a memorandum of understanding (MOU) at a news conference attended by Automotive News this week, Honda and Nissan said it will consider jointly sharing and procuring e-axles and other core EV components, as well as battery technologies and software platforms, as it seeks to achieve the scale required to remain competitive.

Honda CEO Toshihiro Mibe and Nissan CEO Makoto Uchida said the synergies could be spread across as many as 7.65 million vehicles sold annually.

Full details about the scope of the partnership are yet to be announced, with Mr Mibe and Mr Uchida saying a feasibility group to study possibilities and report on areas with the best potential will be established in a “short amount of time”.

“Can we survive? That is the question,” said Mr Mibe of the industry’s switch to electric motoring. “By 2030, we have to be a top runner, in a position to fight against the top players.”

Mr Mibe’s sentiments were echoed by Mr Uchida, who said scale and cost are key focal points of the MOU – and that both companies must think outside the box to reinvent their businesses if they wish to remain competitive.

“We cannot afford to be complacent,” he said. “Emerging players are making inroads with high competitiveness and totally different business models.”

Both parties said that for the time being there are no plans to share products or badge-engineer vehicles. Capital crossholdings are also out of the picture for now, though both Mr Mibe and Mr Uchida told Automotive News they would not close the door on such ideas in the future.

The scale of the proposed partnership is significant. Nissan plans to sell 3.55 million vehicles in the fiscal year ending March 31 and Honda 4.10 million vehicles. It is understood that access to vehicle programs from within the Renault-Nissan-Mitsubishi alliance may also provide Honda with a competitive edge in bringing new EVs to market more quickly.

Although it is yet to be determined which markets will benefit from the collaboration, Automotive News reports that a Honda-Nissan alliance would help the pair brace for the expected onslaught of low-cost EV makers from China and India, both already selling strongly in Southeast Asian markets – traditional strongholds for the Japanese pair.

It is further understood that Japanese market kei (or minicar) vehicle development could also benefit from the collaboration, the idea that neither’s business models can survive alone now becoming an all-too-apparent reality.