In major news on Japanese stocks, Honda Motor Co. (JP:7267) and Nissan Motor Co. (JP:7201) are considering an electric vehicle (EV) partnership to boost their global presence, given the solid growth prospects in this segment. According to Nikkei, both companies will collaborate on the production of EV components, automotive software, and EV charging infrastructure, which could extend to six different areas.
Honda shares are trading up 3.2% as of writing, while Nissan shares have gained over 4%.
Honda and Nissan Gear Up Against Competition
The move by Honda and Nissan highlights the growing competitive pressures in the EV space, dominated by U.S. giant Tesla (NASDAQ:TSLA) and Chinese players, including BYD Co. (HK:1211). The two Japanese carmakers have faced significant challenges in key markets like China, where price-sensitive consumers and an oversupply of software-loaded EVs have impacted their operations.
With this potential partnership, Honda and Nissan aim to reduce production costs and streamline their operations, targeting China’s price-sensitive consumers and gaining a higher market share in the region.
Earlier in March, Nissan announced its aggressive plans to launch 30 new models, of which 16 will be EVs and plug-in hybrids, for global markets by 2026. Nissan also aims to cut next-gen EV costs by 30% by Fiscal Year 2030.
Similarly, Honda revealed its plan to drive 40% of its total global sales via EVs by 2030. Under this plan, Honda will invest around ¥10 trillion in EVs and software strategies over a ten-year horizon through 2030. Additionally, Honda will introduce 10 EV models in China by 2027 and aims to sell only EVs in the country by 2035.
Year-to-date, Honda Motor stock has increased by nearly 20%, while Nissan has grown by 2%.
