Japanese stock markets: Nissan, Honda consider electric vehicle partnership to strengthen global presence

In major Japanese stock news, Honda Motor Co. (Japanese:7267) and Nissan Motor Co. (Japanese:7201) are considering an electric vehicle (EV) partnership to strengthen their global presence, given the strong growth prospects in this segment. NikkeiThe two companies will collaborate on the production of electric vehicle components, automotive software and electric vehicle charging infrastructure, which could extend to six different areas.

Honda shares are trading up 3.2% at the time of writing, while Nissan shares have gained more than 4%.

Honda and Nissan prepare to face competition

The move by Honda and Nissan highlights growing competitive pressures in the electric vehicle sector, which is dominated by U.S. giant Tesla (NASDAQ: TSLA) and Chinese players including BYD Co. (Hong Kong:1211). Both Japanese automakers have faced significant challenges in key markets like China, where price-sensitive consumers and an oversupply of software-powered electric vehicles have impacted their operations.

With this potential partnership, Honda and Nissan aim to reduce production costs and streamline their operations, targeting price-sensitive Chinese consumers and gaining a higher market share in the region.

In early March, Nissan announced its ambitious plan to launch 30 new models, 16 of which will be electric and plug-in hybrid vehicles, for global markets by 2026. Nissan also aims to reduce the cost of next-generation electric vehicles by 30% by fiscal 2030.

Similarly, Honda unveiled its plan to generate 40% of its total global sales through electric vehicles by 2030. As part of this plan, Honda will invest approximately 10 trillion yen in electric vehicles and software strategies over a ten-year horizon through 2030. Additionally, Honda will introduce 10 electric vehicle models in China by 2027 and aims to sell only electric vehicles in the country by 2035.

Since the beginning of the year, Honda Motor’s shares have risen nearly 20%, while Nissan’s have gained 2%.

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