Japanese automakers Nissan and Honda have fallen behind industry leaders such as US-based Tesla and China-based BYD. At least when it comes to electric cars. Two Japanese automotive giants decided to put an end to this situation with a partnership.
Nissan and Honda officially announced their partnership
Nissan and Honda are determined to take their steps consistently. Sources from Nissan said that the automaker came together with Honda and signed a joint contract to develop batteries and electric cars.
Nissan and Honda officially announced their collaboration on Friday, signing an agreement to advance electric car and software development. Japanese automakers will develop new software platforms, electric car parts and other related technologies.
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Nissan CEO Makoto Uchida stated that 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 stated that they hope to become industry leaders by combining technology and knowledge by creating new value.
Automakers could collaborate on purchasing, while Nissan is considering switching to a common electric car powertrain. They could also collaborate on a new common electric car platform.
This new partnership was made as a result of both automakers (and the Japanese auto industry) failing to keep up with electric car industry leaders like Tesla and BYD. The aim, sources say, is to lower electric car prices to compete with low-cost leaders in China.
After dominating its local market, BYD began to expand abroad. Earlier this year, BYD declared a war on gasoline vehicles by dropping electric car prices below $10,000. According to the Chinese automaker, low prices are directly destroying joint venture vehicles.
This includes Nissan and Honda, as both companies have struggled to maintain production in China and have drastically reduced production. This move caused Japanese automakers to start losing market share in the region, accounting for 10% to 20% of their net profits.
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In short, Japanese automakers, who have lost market share to electric car leaders such as Tesla and BYD, are feeling the pressure.
BYD overtook Japan last year to become China’s leading automobile exporter, accounting for 20% of Japan’s electric car imports in January. While electric car sales are increasing rapidly, China surpassed Japan for the first time last year and became the leading automobile exporter.
Nissan, which entered the electric car market with the launch of the LEAF in 2010, has been left behind. It took over 10 years for their second mass-market electric car, the Ariya, to be released.
After a rough start, Ariya production has finally gotten back on track. Nissan is now preparing to launch the next generation of electric cars, which will succeed the LEAF and replace the electric Juke and Qashqai (Rogue Sport in the US).
Meanwhile, Prologue, Honda’s first electric SUV, will go on sale in US dealerships this month. Based on GM’s Ultium platform, Prologue offers a range of 476 km.
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It will be interesting to see what Nissan and Honda can do. What are you thinking? Please don’t forget to share your thoughts with us in the comments section below.