Japan’s Honda, Nissan, Mitsubishi unite on EV, AI to compete with Tesla, BYD

In a significant move in the development of electric vehicles, Japanese automakers Nissan, Honda, and Mitsubishi have joined forces to challenge EV giants like Tesla of the US and China’s BYD.

The companies plan to collaborate on sharing components for electric vehicles, such as batteries, and conducting joint research on software for autonomous driving.

The collaboration aims to reduce costs and enhance competition in markets like China, where sales are declining.

Mitsubishi, which already has ties with Nissan, will participate in a broader strategic partnership with Nissan and Honda.

Dramatic changes in the auto market
The Japanese local media reported that the trio had formed to respond to significant automotive industry changes, particularly in electrification.

After 100 days of negotiations, the executives of the companies demonstrated a sense of urgency.

Japanese automakers have been dominant in the era of gasoline engines in recent decades, but they have fallen behind formidable new players in green cars, such as Tesla and BYD.

“Companies that don’t adapt to the changes cannot survive,” said Honda Chief Executive Toshihiro Mibe. “If we try to do everything on our own, we cannot catch up.”

When asked whether there were any talks of a capital alliance, Mibe said, “We have not discussed a capital alliance as yet, but we don’t deny the possibility.”

The partnership aims to share costs through joint development and pits the trio against Toyota Motor. Toyota has built its consortium through stakes in Subaru, Suzuki Motor, and Mazda Motor.

Nissan is strengthening its bond with Honda after reworking its alliance with Renault following the fallout from the arrest of former Chairman Carlos Ghosn in 2018.

“Although we have different cultures, we share the same challenges,” Nissan Chief Executive Officer Makoto Uchida said at a news conference with Mibe. “Our key area of collaboration will be software.”

Japanese automakers losing shares
Japanese automakers are losing market share in China due to the growing popularity of electric vehicles made by companies like BYD. This trend is particularly noticeable in the premium segment of the market.

In June, Honda and Nissan sales dropped by approximately 40% and 27% in China, respectively, as some of their local plants were shut down.

Last week, Honda reduced gasoline car production by 19% in Japan, following Mitsubishi Motors’ exit last year.

Honda, Nissan, and Mitsubishi sold approximately 4 million units globally in the first six months through June, whereas Toyota alone sold 5.2 million units.

Honda and Nissan’s closer partnership will enable them to capitalize on each other’s strengths, including implementing various powertrain options.

It will also help to offset the substantial expense of adapting to the broader trend of automation.

The trio agreed that their model lineups would “mutually complement” each other in various global markets, including internal combustion engine vehicles and EVs. The companies said that details are still being worked out.

Although Honda and Nissan have very different corporate cultures, it became clear, as their discussions on working together continued, that Uchida said their engineers and other workers on the ground have a lot in common.

By Editor