Honda and Nissan to Explore Merger in Bid to Catch Up in EVs

Japanese auto giants Honda and Nissan agreed on Monday to launch talks on a merger, aiming to compete with Chinese rivals and Tesla in the electric vehicle market. The collaboration would create the world's third largest automaker, bolstering the development of EVs and self-driving technology. However, Honda's CEO emphasized that the merger was not a bailout for struggling Nissan, which recently announced job cuts and a significant drop in profits.

He stressed that Nissan must complete its 'turnaround' plan as a condition for the merger. The move comes amid a challenging business environment for automakers, with sluggish consumer spending and fierce competition, particularly in China, where electric vehicle manufacturers like BYD are gaining ground. The two firms, along with Mitsubishi Motors, signed a memorandum of understanding to explore integrating their businesses under a new holding company, with plans to list it on the Tokyo Stock Exchange in August 2026. This follows reports that Taiwanese electronics giant Foxconn had previously approached Nissan for a majority stake, and then Renault for its 35 percent stake in Nissan, although those pursuits are now reportedly on hold. China's rise as the largest vehicle exporter last year, fueled by government support for EVs, has added to the pressure on Japanese automakers. Honda and Nissan, Japan's second and third largest automakers after Toyota, had already agreed in March to explore a strategic partnership on software and components for EVs and other technologies

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