(Tokyo) Japanese auto giants Honda Motor and Nissan Motor will begin merger talks to allow them to compete with Tesla and other electric vehicle makers, the Nikkei newspaper reported Wednesday morning.
Posted at 1:36 p.m.
The two manufacturers are seeking to operate under a single holding company and will soon sign a memorandum of understanding for the new entity, according to Tokyo-based Nikkei.
Honda and Nissan will consider including Mitsubishi Motors, of which Nissan is the main shareholder, within the holding company, to create one of the largest automobile groups in the world.
Honda and Nissan announced in March that they had agreed to explore a strategic partnership in electric vehicles and other areas.
Analysts said the move was aimed at catching up with Chinese competitors who have taken the lead in producing electric vehicles, while Japanese companies have lost ground by focusing more on hybrid vehicles.
China overtook Japan as the world’s largest vehicle exporter in 2023, thanks to its dominance in electric cars.
Honda announced in May that it plans to double its investments in this area to $65 billion by 2030, with the goal of selling 100% electric vehicles by 2040.
Nissan has displayed similar ambitions, saying in March that 16 of the 30 new models it plans to launch over the next three years would be “electrified.”
Global automotive giants are increasingly favoring the electric and hybrid car sector, with climate change and growing demand for less polluting models.
But at the same time the high prices of these models, their low autonomy and the insufficiency of charging stations have cooled consumers.
Hybrids which combine a thermal engine and an electric engine have proven very popular in Japan, representing 40% of sales in 2022. Japanese manufacturers have, however, neglected the growing demand for fully electric cars.
Only 1.7% of cars sold in Japan in 2022 were electric, compared to 15% in Western Europe and 5.3% in the United States.
