Nissan and Honda Commence Strategic Partnership in Electric Vehicle Production. What About Renault?

Automobile giants Nissan Motor Co. and Honda Motor Co. announced today a strategic partnership and agreed to launch a feasibility study on electric vehicles and other advanced technologies to cut costs and increase competitiveness, Kyodo reports. 

The move comes as competition in the global electric vehicle market has intensified. Sales of all-electric vehicles are growing in many markets as more countries seek to decarbonise.

So this new merger will create a powerful Japanese alliance to fight dominant foreign rivals such as industry giant Tesla Inc. and China's BYD Co.

Japanese carmakers are considering, among other things, joint purchases of spare parts, while sharing key components for their electric vehicles.

Cutting costs is crucial in the development of fully electric cars, which are equipped with expensive batteries and other complex systems.

The new partnership with Honda could mean a shift in Nissan's current EV strategy, which focuses on alliances with Renault SA of France and Mitsubishi Motors Corp.

Last year, Nissan decided to invest in a new venture, Renault Ampere, to expand its electric vehicle line-up. However, the French carmaker cancelled its plan to list the new company on the stock exchange in January this year, citing an unfavourable market environment.

So now Honda, which has traditionally preferred to develop cars on its own, has been increasing its cooperation in the field of electric vehicles with other companies, such as Sony Group Corp. and General Motors Co.