Honda Motor and Nissan Motor are discussing a potential partnership on electric vehicle development. The two Japanese auto giants look to challenge Tesla and China's BYD with EV demand appearing to slow.
Honda and Nissan said Friday they have agreed to begin a feasibility study on an EV production partnership. The Japanese automakers are looking to cut costs and improve competitiveness in the global EV market. Neither company ranked among the top 25 producers of plug-in EVs in 2023, according to J.D. Power data.
BYD and Tesla are Nos. 1 and 2 by number of EV autos sold, respectively.
The Wall Street Journal reported Friday that early discussions involve joint procurement and development of components, including batteries. Nissan is considered a bit of an EV pioneer based on its compact Leaf car, which it launched in 2010.
Honda stock advanced 2.4% to 36.09 during Friday market action. Nissan stock gained 3.4% while Tesla stock edged up 0.6% to 163.56.
BYD shares angled 0.8% higher to 26.85.
Legacy Automakers Dial Back EV Ambitions
The move by Honda and Nissan comes as U.S. legacy automakers Ford and General Motors have dialed back EV plans. Meanwhile, Toyota Chief Executive Ted Ogawa in an Automotive News published interview on March 1, said the company will continue to focus on hybrid vehicles. Ogawa added that Toyota is better positioned to buy credits rather than "waste" money on battery electric vehicles.
"We can no longer fight in the existing framework in the face of the rapid change in the industry," Honda President Toshihiro Mibe said in a news conference Friday.
Nissan Chief Executive Makoto Uchida added that emerging EV companies "are trying to gain dominance by capitalizing on their overwhelming price competitiveness and speed."
"It is not possible to develop technologies for electric and intelligent vehicles on our own," the Nissan CEO added.
Tesla: EV Sales Slowing, Delivery Miss Upcoming
Global electric vehicle sales appear to be slowing amid weakening demand and growing competition, according to analysts.
Tesla looks set to miss Wall Street's Q1 delivery estimates, with many analysts revising numbers in recent days. Meanwhile, Tesla Chief Executive Elon Musk has said China's EV companies are Tesla's main competition. BYD, Nio, Li Auto and others are all making inroads in the EV market.
Additionally, BYD overtook its U.S. rival in global battery electric vehicle (BEV) deliveries in the fourth quarter of 2023. It was already far above Tesla EV sales including plug-in hybrids (PHEVs). Warren Buffett-backed BYD has also decided to open a plant in Europe, moving onto Tesla's turf on another continent. BYD already is building plants in Thailand and Brazil.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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