Nissan and Honda confirm cooperation, including on electric cars

Japanese car manufacturers Nissan and Honda have officially confirmed plans for a strategic partnership in electric cars and other areas. The manufacturers’ intention to work together was already leaked last week.

Honda announces that both companies have signed a letter of intent “to strengthen environmental and electrification technologies as well as software development.” The competitors agree that combining strengths and examining the possibilities of future cooperation is necessary.

Prepare for the future

According to Makoto Uchida, Nissan’s President and CEO, it is crucial to prepare for the increasing pace of change in mobility in the medium to long term. “It is important to prepare for the increasing pace of transformation in mobility in the mid-to-long-term, and, significantly, we have reached this agreement based on a mutual understanding that Honda and Nissan face common challenges.”

Uchida added that Nissan is looking forward to further discussions and is endeavoring to find win-win situations for sustainable growth.

Toshihiro Mibe, Honda’s Director and President, said: “In this period of once-in-a-century transformation in the automotive industry, we will examine the potential for partnership between Nissan and Honda. Our study criteria will be whether the synergy of the technologies and knowledge that our companies have cultivated will enable us to become industry leaders by creating new value for the automotive industry.”

The Chinese problem

The two Japanese manufacturers’ interest in working together had already been leaked. The information was mainly based on TV Tokyo and Nikkei Asia reports, which relied on insiders. TV Tokyo stated that both sides were discussing an alliance in undefined fields. Nikkei wrote that Nissan and Honda could work together on electric vehicles to compete better with their Chinese rivals.

It has also recently become known that Nissan and Honda plan to significantly reduce their production capacities in China because they allegedly struggle to keep up with Chinese competitors in the electric car race. However, this will be merely a reduction in production capacity and not a (partial) sale of shares in the respective China joint ventures.

EV strategy

Citing several Nissan sources, Nikkei also reported that both Japanese companies are considering introducing a joint powertrain, joint procurement, and joint platform development. Moreover, the cooperation could “possibly” extend to the procurement of batteries and the joint development of electric vehicles.

Nissan has, until now, been firmly alongside Renault when it comes to EVs, especially in Europe. Nissan’s next electric Micra will be built on the same platform as the recently unveiled Renault 5, but both sides somewhat loosened their alliance in 2023. Since then, Renault has also been cooperating with new partners, such as Geely.

Since the Alliance partners have restructured their cooperation, they have much more liberty toward each other. They can work together but can also have other cooperations. Hence, the intention is to work with Honda.

Meanwhile, Renault is also seeking a new partner to produce the sub-20,000 euro EV (Twingo successor). Recently, there have already been rumors that the VW Group could be a possible partner in this, but Renault insists that there are talks with different competitors.

European challenge

Both European manufacturers (and others) are confronted with the same challenge: producing a small EV costing less than €20,000 and making money with it. Renault CEO de Meo recently said that the production location was not yet defined, but it could be Nove Mesto in Slovenia. That plant has been almost idle since Mercedes left (the Smart Forfour was produced there), and only the current Twingo is produced there (also in pure electric form).

Last week, VW Group CEO Oliver Blume confirmed that nothing has been decided yet about a possible cooperation between VW and Renault. The latter has clarified that VW wasn’t the only manufacturer that Renault has approached.