Nissan and Honda consider partnership on EVs, AI

By Maki Shiraki

TOKYO (Reuters) -Nissan Motor and Honda Motor are considering a strategic partnership to collaborate on producing key components for electric vehicles (EVs) and artificial intelligence in automotive software platforms, the companies said today.

The potential partnership could help the two rivals develop economies of scale in producing EVs, which is crucial for Japanese automakers as they face heavy competition from China’s BYD, Tesla and other electric vehicle makers.

“Emerging players are very aggressive and are making inroads at incredible speed,” Nissan chief executive officer (CEO) Makoto Uchida told a press briefing.

“We cannot win the competition as long as we stick to conventional wisdom and traditional approach,” he said.

The two companies signed a non-binding memorandum of understanding to look at areas of potential collaboration but are yet to determine the scope, Honda president Toshihiro Mibe said.

The companies are open to working together in any region, both in Japan and overseas, Uchida said.

Nissan has existing business alliances with Renault and Mitsubishi Motors, but these will not be affected by a potential alliance with Honda, he said.

Nissan cooperates with Renault on EVs, mainly in Europe. The next Nissan electric Micra will share the same architecture as the new Renault Five and be built in the same plant in northern France.

But the two firms last year reduced the scope of a years-long alliance to allow for a more agile partnership, and Renault has since signed agreements with new partners such as China’s Geely.

Uchida said that the companies were open to collaboration with existing partners should opportunities arise.

The companies will explore cost-cutting measures, Mibe said, adding that achieving cost-effectiveness requires greater production levels.

Honda is aiming to increase its ratio of electric vehicles and fuel cell vehicles to 100% of all sales by 2040.

Nissan and Honda are yet to discuss a capital tie-up, but they are open to the possibility in the future, Mibe said.

“We are strapped for time and need to be speedy,” he said. “In 2030 to be in a good position we need a decision now.”

Nissan’s pursuit of a partnership was first reported by TV Tokyo. The Nikkei newspaper has reported specific measures could include the introduction of a common powertrain, joint procurement and the development of a common platform.

(Reporting by Maki Shiraki; Writing by Makiko Yamazaki and Anton Bridge; Additional reporting by Kantaro Komiya and Satoshi Sugiyama; Editing by Himani Sarkar, Michael Perry and Lincoln Feast.)