Maki Shiraki
TOKYO (Reuters) – Nissan Motor is considering a business partnership with Honda (NYSE:) Motor on key electric vehicle components to cut manufacturing costs, three people familiar with the matter said at Nissan (OTC:).
A potential partnership with domestic rival Honda could help Nissan achieve economies of scale in its EV production, which is critical for Japanese automakers as they face stiff competition from China’s BYD (SZ:), Tesla (NASDAQ:) and other EV makers .
The sources, who requested anonymity because the matter is still private, said Nissan and Honda have not yet begun formal talks and the scope of the partnership has not yet been determined.
A Nissan spokesman declined to comment. A Honda spokesman said the company had nothing to say.
The heads of the two automakers are due to hold a joint press conference in Tokyo at 15:30 (0630 GMT).
Another source said the idea of cooperation arose between company executives.
Nissan is considering collaborating with Honda on key parts for electric vehicles as well as “kei cars” – boxy cars that are smaller and less powerful than conventional cars and primarily aimed at the domestic market.
The partnership could expand to overseas operations, but would impact Honda’s existing partnership with General Motors (NYSE:), two of the sources said.
Nissan’s pursuit of a partnership was first reported by Tokyo television. The newspaper reports that specific measures could include the introduction of a common powertrain, joint procurement and the development of a common platform.
A Honda source said a potential partnership with Nissan is one of many opportunities the company is considering, but there are many issues that need to be sorted out before embarking on a new collaboration.
Honda aims to increase the share of electric and fuel cell vehicles to 100% of all sales by 2040.
Nissan is already collaborating with Renault (EPA:) on electric vehicles, mainly in Europe. The next electric Nissan Micra will have the same architecture as the new Renault Five and will be produced at the same plant in northern France.
Nissan has also committed to invest up to 600 million euros ($653 million) in Renault’s new electric vehicle venture, Ampere.
But last year the two companies scaled back the long-standing alliance to allow for a more flexible partnership, and Renault has since signed deals with new partners such as China’s Geely.