Japanese automakers Nissan and Honda have fallen behind industry leaders like Tesla in the US and BYD in China. At least when it comes to electric cars. The two Japanese automotive giants have decided to put an end to this with a partnership.
Nissan and Honda officially announce their partnership
Nissan and Honda are determined to take consistent steps forward. Sources at Nissan say the automaker has teamed up with Honda to jointly develop batteries and electric cars.
Nissan and Honda officially announced their collaboration on Friday, signing an agreement to advance electric car and software development. The Japanese automakers will develop new software platforms, electric car parts and other related technologies.
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Nissan CEO Makoto Uchida said it is important to prepare for the increasing pace of mobility transformation in the medium and long term. Uchida emphasized that the cooperation with Honda is important and that the two companies face common challenges.
Honda CEO Toshihiro Mibe said that they hope to become industry leaders by creating new value through the combination of technology and knowledge.
Nissan is considering moving to a common electric car powertrain, while automakers could cooperate on purchasing. They could also collaborate on a new common electric car platform.
This new partnership is the result of both automakers (and the Japanese automotive industry) failing to keep pace with electric car industry leaders like Tesla and BYD. According to sources, the aim is to lower electric car prices to compete with the low-cost leaders in China.
After dominating its local market, BYD started to expand abroad. Earlier this year, BYD declared a war against gasoline-powered vehicles by lowering electric car prices below $10,000. According to the Chinese automaker, low prices directly destroy joint venture vehicles.
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This also includes Nissan and Honda, as both companies have drastically reduced production in China, struggling to maintain production. This move has caused Japanese automakers to start losing market share in the region, which accounts for 10% to 20% of their net profits.
In short, Japanese automakers are feeling the pressure as they lose market share to electric car leaders like Tesla and BYD.
BYD overtook Japan last year to become China’s leading car exporter, accounting for 20% of Japan’s electric car imports in January. With electric car sales surging, China overtook Japan as the leading car exporter for the first time last year.
Nissan, which entered the electric car market with the launch of the LEAF in 2010, lagged behind. Their second mass-market electric car, the Ariya, took over 10 years to launch.
After a difficult start, Ariya production has finally settled down. Nissan is now preparing to launch the next generation of electric cars, the successor to the LEAF and replacement for the electric Juke and Qashqai (Rogue Sport in the US).
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Meanwhile, Honda’s first electric SUV, the Prologue, will go on sale in US dealerships this month. Based on GM’s Ultium platform, the Prologue offers a range of 476 km.
It will be interesting to see what Nissan and Honda can do. What do you think? Please don’t forget to share your thoughts with us in the comments section below.
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