Japan's second and third largest automakers are putting aside their historically bitter rivalry to prepare for a coming wave of high-tech, low-cost models from China.
As reported by Electrek, Nissan and Honda said they are considering a “strategic partnership” to collaborate on key components for electric vehicles and artificial intelligence in automotive software platforms.
The goal is to reduce costs for electric vehicles as competition has intensified with the entry of Chinese players. Automakers like BYD benefit from their own supply of components such as batteries, which make up a significant portion of the cost of an electric vehicle.
Nissan CEO Makoto Uchida said it is “important to prepare for the increasing pace of mobility transformation in the medium to long term” and explained that the partnership with Honda is “important” given that they “face common challenges.” Toshihiro Mibe, Honda's CEO, says the company will see if the combination of technology and knowledge allows them to “become industry leaders by creating new value.”
Given Nissan's intention to move to a single (unified) powertrain for electric vehicles, automakers may team up for joint purchases to reduce costs. They could also collaborate to create a new common platform for electric vehicles.
Meanwhile, BYD, after dominating the domestic market, began expanding into foreign markets. At the beginning of 2024, the company declared “war” on gas-powered cars, reducing the price of electric cars to $10,000.
BYD says the low prices “directly destroy” the benefits of the joint venture's vehicles. That includes Nissan and Honda – a Nikkei report claims they are sharply cutting production in China after struggling to keep up. Companies are losing share of the region, which accounts for 10% to 20% of their net profits.
Tesla vs BYD. Top 10 largest electric vehicle manufacturers in 2023 (world ranking)
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