Honda and Nissan Merger Plans Could Accelerate EV R&D
After reports of a potential merger between the two automakers surfaced in recent weeks, Honda and Nissan have officially announced that both parties have signed a memorandum of understanding (MOU) to begin discussions for a merger. The joining of the two entities would result in a joint holding company.
The merger could benefit both companies as one is eager to jump-start its electric vehicle lineup in the US while the other has been struggling to find its financial footing.
Honda has been seen as slow to adopt electrification in the United States. After ending the run of the Honda Clarity EV in 2020, the automaker has only recently reentered the EV market with the Prologue. The vehicle is a joint venture between GM and Honda and is built on General Motors' battery platform previously known as Ultium.
Honda's next lineup of EVs will be built on its own platform and the company is actively pursuing solid-state batteries that it hopes to introduce to the market by 2030.
Nissan on the other hand has had a rough go of it in the past few years. Nissan CEO Makoto Uchida in November said that the company was in an "extremely tough situation." It recently announced layoffs in an attempt to cut costs.
At one point, the Nissan Leaf was the best-selling EV in the world. The vehicle's sales numbers were eventually eclipsed by the Tesla Model 3. Nissan eventually added a second EV, the Ariya, to its lineup in the United States in late 2022. The vehicle's launch was delayed by the global chip shortage and was originally scheduled to land on US shores in 2021.
This merger would benefit both companies as they navigate a quickly changing automotive landscape. According to Nissan and Honda, the merger would allow the companies to jointly research technologies including software-defined vehicles (SDV) and electrification.
The companies also announced that the joint venture would help standardize platforms across both companies. That would reduce vehicle development and production costs. It would also introduce a potential body-on-frame solution for Honda if the automaker sees fit to introduce a large pickup.
In a press release, Honda CEO Toshihiro Mibe stated, "Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing. Honda and Nissan are two companies with distinctive strengths."
Ahead of this news, Honda announced that it will introduce the latest update to its 0 series architecture at CES in a few weeks with two vehicles. How those vehicles (which were introduced in January 2024 as concept cars) will be integrated into a potential merger is unknown.
Detroit-based analyst Sam Abuelsamid told SAE, "A merger of Honda and Nissan may allow Honda to utilize some of Nissan's new small EV platforms for the Leaf and Micra and Europe while potentially giving Nissan access to the new 0 Series architecture in North America. Another key benefit for Nissan may be getting use of Honda's hybrid powertrain to fill a major gap in its NA product lineup. Honda may also want to utilize Nissan's body on frame platforms from the Frontier and Armada/Patrol/QX80 to give it access to products it has never offered. The two could also combine resources on ICE development and use common engines, most likely based on Honda's units."
It's important to note that Nissan alliance member Mitsubishi Motors Corp. has also agreed to be part of the talks although it seems to want to see how things play out before joining the joint venture.
Currently, the merger is not finalized. There are still potential issues that could spike the deal, but it looks more likely to happen than not. If it does come to pass Honda would essentially be in charge of the joint venture. The current plan is to have a definitive agreement to integrate the two businesses in June 2025.