Honda and Nissan team up on electric cars to tackle rising costs... and growing Chinese rivals

Honda and Nissan have signed a memorandum of understanding to work together on developing electric cars in an effort to “accelerate efforts toward carbon neutrality and zero traffic-accident fatalities”.

Nissan, part of the Renault–Nissan–Mitsubishi Alliance, and Honda, which has also formed other partnerships with brands in the pursuit of speeding up development of electric cars, confirmed the MoU after it was reported last week.

The two companies will “combine their strengths and explore the possibility of future collaboration” in the areas of “automotive software platforms, core components related to EVs, and complementary products”.

The announcement comes after several reports late last week, notably from Nikkei Asia, which said at the time it wasn’t clear if Honda would come to the table on the deal.

The reports also quote Nissan President and CEO Makoto Uchida as saying the “conventional” methods of doing business wouldn’t allow the brands to keep up with fast-growing rivals like those from China.

“Emerging players are very aggressive and are making inroads at incredible speed," he told media, according to Reuters.

“We cannot win the competition as long as we stick to conventional wisdom and a traditional approach.”

With the deal now public, heads of both brands have spoken on the matter in a joint press release.

Uchida said in the media statement it’s “important to prepare for the increasing pace of transformation in mobility in the mid-to-long-term”.

Toshihiro Mibe, Honda Director, President and Representative Executive Officer, seemed more enthusiastic about the partnership, referring to a “period of once-in-a-century transformation in the automotive industry”.

“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.”

This is not the first time Honda has struck a major deal with another brand to work together on developing electric cars, having worked with Sony for some time developing vehicles under the joint venture known as Afeela.