Japan’s second and third largest automakers are putting aside their historic fierce rivalry in preparation for the coming wave of high-tech, low-cost models from China.
How reports Electrek, Nissan, and Honda have announced that they are considering a «strategic partnership» to collaborate on the production of key components for electric vehicles and artificial intelligence in automotive software platforms.
The goal is to reduce the cost of electric vehicles as competition has intensified with the emergence of Chinese players. Automakers such as 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 that it is «important to prepare for the increasing pace of mobility transformation in the medium and long term» and explained that the partnership with Honda is «important» given that they «face common challenges». Toshihiro Mibe, CEO of Honda, says the company will see if the combination of technology and knowledge will allow them to «become industry leaders by creating new values».
Given Nissan’s intention to switch to a single (unified) transmission for electric vehicles, automakers can come together for joint procurement to reduce costs. They could also collaborate on a new common platform for electric vehicles.
Meanwhile, BYD, after dominating the domestic market, has begun to expand overseas. In early 2024, the company declared a «war on» gas-powered cars by reducing the price of electric vehicles to $10,000.
According to BYD, low prices directly destroy all the advantages of cars produced by joint ventures. This applies to Nissan and Honda — The Nikkei report claims that they are drastically reducing production in China after trying to keep up. Companies are losing share in the region, which accounts for 10% to 20% of their net profits.