Honda, Nissan and Mitsubishi may join hands to counter Tesla Chinese EV OEMs

To counter the dominance of Chinese rivals and Tesla in the electric vehicle industry, Honda Motors and Nissan Motor have started talks about a merger by 2026. 

Nisan and Honda stated on Monday that they would consider joining hands with each other to create the third-largest auto group in the world in terms of vehicle sales. The merger is only outmatched by Toyota Motors of Japan and Volkswagen in Europe. 

Since 2021, when Fiat Chrysler Automobiles and the PSA Group merged to become Stellantis, which runs more than a dozen brands, the alliance between Japan's second and third-largest automakers would be the largest upheaval in the sector.

“If realised, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands,” citing a statement by Nissan CEO Makoto Uchida Quartz reported. 

He further said, “Together, we can create a unique way for them to enjoy cars that neither company could achieve alone,” the report added.

The joint venture of Hinda and Nissan may also see a third partner– Mitsubishi Motor. However, the largest shareholding in the partnership will be with Nissan. Any further update of Mitsubishi joining the venture will be announced at the end of next month, according to a statement by the companies.  

Talks between Nissan and Honda are expected to conclude in June 2025, and a year later, a holding company will be established, and shares will be delisted. The majority of the board of directors for the prospective company will be chosen by Honda.

The "rise of Chinese automakers and new players has changed the car industry quite a lot," Honda CEO stated, Toshiro Mibe, said at a news conference in Tokyo on Monday, the Quartz reported.  He also added that the firms must improve their products by 2030, "otherwise we'll be beaten."

Honda and Nissan started looking into this partnership in March. The firms stated at the time that they would be concentrating on working together on electric vehicles and related components to better compete with Chinese automakers and Tesla. They decided to cooperate in August and added Mitsubishi as a possible third partner.

Last month, Nissan announced that it would cut 9,000 jobs and a fifth of its production capacity in reaction to poor sales in the U.S. and China. Along with a sales miss over the previous nine months, primarily due to the Chinese market, Honda reported a 15% drop in operating profit for its most recent quarter. Earlier this year, Honda and Nissan reduced their manufacturing in China, with the former reducing its alliances with regional partners as its once-largest market became increasingly competitive.