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Why Nissan is Considering a Deal With Honda on EVs

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Nissan Motor is proposing a business cooperation with Honda Motor on essential components for electric vehicles to reduce production costs, according to three Nissan sources.

The proposed alliance with local rival Honda will help Nissan achieve scale, which is critical for Japanese automakers facing stiff competition from China’s BYD, Tesla, and other electric vehicle manufacturers.

The sources, who declined to be identified because the topic is still private, said Nissan and Honda have yet to formally begin conversations, and the breadth of the alliance is unknown.

According to another version, the notion of partnership originated among the companies’ CEOs. Nissan is considering collaborating with Honda on crucial EV components as well as “kei car” – boxy vehicles that are smaller and less powerful than ordinary cars and are primarily designed for the domestic market.

The relationship could expand to include global enterprises, although this would have an impact on Honda’s current collaboration with General Motors.

TV Tokyo originally revealed Nissan’s desire for a collaboration. Nissan’s representative declined to comment.

A Honda spokesman stated the corporation had nothing to say. According to a Honda insider, a potential partnership with Nissan is one of several options under consideration, but there are numerous agenda items that must be addressed before a new collaboration can be pursued.

By 2040, Honda hopes to have 100% of its sales coming from electric and fuel-cell vehicles. Nissan already works with Renault on EVs, primarily in Europe.

The upcoming Nissan electric Micra will have the same architecture as the new Renault Five and be constructed in the same plant in northern France.

Nissan has also agreed to invest up to 600 million euros ($652.50 million) in Renault’s new electric vehicle subsidiary Ampere.

However, the two companies narrowed the scope of a long-standing alliance last year to allow for a more dynamic relationship, and Renault has since forged agreements with new partners like as China’s Geely.

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