Honda\u2019s potential merger with Nissan would represent one of the largest shake-ups to the industry since the creation of Stellantis in 2021. But there are huge risks<\/a> involved, too. <\/p>\n<\/div>\n On Tuesday in Las Vegas, during a roundtable discussion with select media, Honda executives offered some more insight into the merger, including how combining resources and factories could help the companies stay competitive in the increasingly costly fight with China.<\/p>\n<\/div>\n Honda is concerned about China\u2019s meteoric rise as a dominant and highly competitive player in the EV and autonomous driving space. In late December, when Honda and Nissan announced that they had signed a memorandum of understanding to create an automotive company worth around $50 billion,<\/a> Honda CEO Toshihiro Mibe said<\/a> that the \u201crise of Chinese automakers and new players has changed the car industry quite a lot… We have to build up capabilities to fight with them by 2030, otherwise we\u2019ll be beaten.\u201d<\/p>\n<\/div>\n Honda executives offered some more insight into the merger<\/p>\n<\/div>\n<\/div>\n The stakes are high, too. According to a recent report by S&P Global Mobility<\/a>, the global EV market will grow nearly 30 percent year over year, with 89.6 million new EVs expected to be sold this year. According to Allied Market Research<\/a>, the global autonomous vehicle market is expected to reach around $60.3 billion in 2025 and is projected to reach $448.6 billion by 2035. If the Japanese automakers want to continue to dominate the market as they have since the 1960s, they have to iterate quickly and get products into consumers\u2019 hands.\u00a0<\/p>\n<\/div>\n \u201cSince the beginning of last year, we\u2019ve been in conversation with Nissan,\u201d Noriya Kaihara, director and executive vice president at Honda, said through a translator following the company\u2019s debut of two \u201cproduction prototypes,\u201d the Honda 0 Saloon and the Honda 0 SUV at CES<\/a>. \u201cNothing has been decided but we\u2019ve been discussing how to proceed.\u201d\u00a0<\/p>\n<\/div>\n During the roundtable, Kaihara said that Honda is looking at Nissan as a way to reduce costs around future software-defined vehicles (SDV).\u00a0<\/p>\n<\/div>\n \u201cWe have significant labor and development costs, and if there are operations we could share, that would be good for us,\u201d he said. Developing brand-new software, he continued, including advanced driving systems that move closer to autonomous vehicles and battery-electric vehicles, is both increasingly important for the longevity of established automakers and increasingly expensive.\u00a0\u00a0<\/p>\n<\/div>\n Honda also said that Nissan\u2019s large SUVs like the Armada\u00a0and Pathfinder make it an attractive partner. Toshihiro Akiwa, VP and head of Honda\u2019s BEV development center, said through a translator that Honda\u2019s hybrid technology is solid but only currently exists in its midsize vehicles like the CR-V and the Accord. The company is interested in Nissan\u2019s larger vehicles because Honda\u2019s \u201cmotor and battery capacity can be adapted to the larger vehicle.\u201d<\/p>\n<\/div>\n While Honda does have the Prologue, that vehicle was part of a $5 billion joint venture with GM<\/a> that only lasted through the development of two vehicles. The Prologue has been a surprise EV hit<\/a>, selling over 33,000 in 2024 and outselling the larger gas-powered Honda Passport. <\/p>\n<\/div>\n Since the partnership with GM went south<\/a>, it\u2019s not likely that the Prologue will be in production long, though Honda has made no announcements about its plans for the vehicle. Honda does not currently offer an all-electric crossover outside of the Prologue, though fans of the brand have been asking for an all-electric CR-V for years.\u00a0<\/p>\n<\/div>\n Nissan, on the other hand, saw its earnings decline by as much as 90 percent last year<\/a>, forcing it to lay off thousands of employees. The company has been struggling since the arrest of former Nissan CEO Carlos Ghosn in 2018 for financial misconduct. Unsurprisingly, Ghosn isn\u2019t pleased about the news, telling Bloomberg<\/em><\/a> that Nissan was in \u201cpanic mode,\u201d calling the deal\u00a0a \u201cdesperate move\u201d and noting that the \u201csynergies between the two companies are difficult to find.\u201d<\/p>\n<\/div>\n But as Honda executives at the roundtable noted, Nissan\u2019s struggle could pose an opportunity for Honda, too. That\u2019s because Honda plants that serve the US are currently running at maximum capacity, and they could use the excess capacity at Nissan\u2019s factories to meet customer demand. \u201cI\u2019m not in a position to make comment [on Nissan], but they have capacity,\u201d Kaihara said.<\/p>\n<\/div>\nHonda wants Nissan\u2019s large SUVs and underutilized factories<\/h4>\n<\/p>\n
Trump\u2019s tariff threats and loss of EV incentives<\/h4>\n<\/p>\n