Nissan and Honda have announced their alliance to develop electric vehicles and auto intelligence technology, addressing sectors where Japanese automakers have fallen behind.
The CEOs of both companies appeared together in Tokyo to unveil this partnership, emphasising their intention to explore areas of potential collaboration.
While the specifics of the non-binding agreement are still being ironed out, both sides have confirmed plans to jointly develop core technologies while maintaining distinct product lines.
Nissan’s CEO, Makoto Uchida, underscored the importance of speed in their technological advancement efforts.
“We don’t have time,” he emphasized. “It’s significant that we’ve reached this agreement with a mutual understanding that Honda and Nissan share common challenges.”
Honda President Toshihiro Mibe noted that the companies share common values and have the potential to create “synergies” in confronting their formidable rivals.
The global automotive industry is swiftly transitioning towards electric vehicles, prioritising advancements in batteries and motors over traditional gas engines, amidst mounting concerns about emissions and climate change.
Japanese automakers, including Nissan and Toyota, have faced challenges in competing with rivals like Tesla from the U.S. and BYD from China in the electric vehicle (EV) market.
This is partly attributed to their historical success with combustion engine vehicles, which made them slower to adapt to the evolving landscape of EVs.
Toyota, the world’s largest automaker, has expressed reservations about a complete shift to EVs, citing concerns about the lack of charging infrastructure.
Instead, the company has focused on hybrid vehicles, which combine a gas engine with an electric motor.
However, Toyota is also anticipated to ramp up its efforts in the EV sector in the coming years.
Nissan has been relatively ahead in the EV market among Japanese automakers, notably with the introduction of the Nissan Leaf in late 2010, making it one of the pioneers in the EV segment.
The high expectations surrounding the Nissan-Honda agreement were evident in the significant increases in the stock prices of both companies on Thursday, following reports in the Japanese media suggesting the possibility of such a deal.
This positive momentum continued on Friday, with Nissan’s shares closing 3.2% higher and Honda’s rising by 1.7%.
However, it’s worth noting that the announcement of the agreement came after trading hours in Tokyo.
While the executives clarified that the agreement does not currently involve mutual capital ownership, they hinted at the possibility of exploring this option in the future.
“How we can raise our competitiveness is what we are determined to pursue,” Uchida stated.
ALSO READ: South Africa’s foreign Minister warns citizens who Join IDF Will face arrest