Honda and Nissan team up on electric vehicle technology to chase Chinese rivals  Automotive industry

Honda and Nissan team up on electric vehicle technology to chase Chinese rivals Automotive industry


Honda and Nissan have put aside the “traditional approach” of fierce competition to join forces and work together on electric vehicle technology as the Japanese automakers try to catch up with Chinese rivals.

Japanese manufacturers will work together on EVs technology, including components and software, after signing a memorandum of understanding on Friday.

Honda and Nissan, the country’s second and third largest automakers behind Toyota, respectively, are aiming to cut costs by combining resources.

Traditional manufacturers are struggling to compete profitably with upstart rivals as the electric vehicle sector grows rapidly, driving up high development costs.

China’s BYD and Li Auto have gained market share in a competitive industry, along with Elon Musk’s Tesla. Earlier this year, BYD, which stands for Build Your Dreams, overtook Tesla as the world’s best-selling electric car maker.

Nissan introduced the first EVs: its all-electric Leaf model became what it claimed was the world’s first electric car when it rolled out in 2009 from its Sunderland factory. But it has struggled to keep up with the speed of Chinese players to find cheap raw materials and labor, as well as large scale and potential customers.

Nissan’s Chief Executive, Makoto Uchida, said: “The emerging players are very aggressive and are entering at an incredible pace.

“We can’t beat the competition as long as we stick to conventional wisdom and traditional methods.”

Honda’s president, Toshihiro Mibe, said: “We are locked in time and we need to act quickly. In 2030, to be in a good position we need a decision now.

“The growth of emerging players is becoming faster and stronger. Companies that cannot respond to change will be wiped out.”

Honda and Nissan each sell more than 3 million vehicles worldwide and the partnership is expected across operations in Japan and overseas.

The agreement between the companies is not binding, meaning that the partnership can still be dissolved, and does not involve any capital. It has been reported that, at the end of 2019, Japanese government officials tried to persuade car manufacturers to form a full merger to create a national champion, but the idea was quickly rejected by the companies.

David Bailey, professor of business economics at Birmingham business school, said: “It’s two Japanese idiots at play. This highlights the threat from China to western car companies, including Japanese ones, and the advantages that China has in having the ability to produce cars at a price of 25% to 30%.

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“The Chinese government has supported EV sales in a big way and you’re seeing more Chinese cars on the road as a result.”

In the UK, Honda closed its plant in Swindon in 2021 after 35 years. Nissan recently ended production of the second-generation Leaf in Sunderland, with its successor expected to be built there from 2026.

Nissan last year moved to balance its partnership with Renault, with the French carmaker reducing its stake in the Japanese company to 43% and Nissan increasing the voting rights associated with its 15% stake in its partner.

Renault used the proceeds to invest in its EV division, Ampere. Uchida previously said that the Ampere is seen as “enabling Nissan to participate in new business opportunities in Europe”.

The pair loosened their two-decade alliance after the company’s shocking scandal involved former boss Carlos Ghosn being arrested for allegedly underreporting his income and then escaping house arrest by hiding in a music box and fleeing on a private jet.

Although EVs are an established market segment, automakers and retailers are still racing to develop the next generation of technology, including solid-state batteries that have been touted as a way to improve vehicle range, as well as vehicle safety. battery.

The industry is also at the center of geopolitical tensions, with political concerns over a heavy reliance on raw materials from China. Late last year, Northvolt, Europe’s only major home battery maker, said it had made a “breakthrough” sodium battery that could tackle the problem.