Nissan Motor Co. is considering cooperating with Honda Motor Co. in the electric vehicle business, sources close to the matter said Thursday, a move that would create a powerful Japanese alliance to take on overseas rivals such as industry giant Tesla Inc.
Nissan is weighing jointly procuring some parts and sharing major components for their respective EVs to lower costs, the sources said. Discussions within Nissan are still in the early stages and Honda's stance on the tie-up remains unclear.
Automakers worldwide are grappling with the higher costs incurred for developing EVs compared with gasoline-powered models as they carry expensive batteries and state-of-the-art software used for autonomous driving and other sophisticated functions.
"I would say it is a realistic move," Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory Co., referring to the potential cooperation between Nissan and Honda.
"They could also expand the scope of cooperation to hybrid cars and batteries," he said.
The two Japanese automakers have been ramping up efforts to strengthen their respective EV businesses in recent years, but overseas rivals such as Tesla and China's BYD Co. still dominate the global EV market.
Nissan has been increasingly cooperating with its alliance partners Renault SA of France and Mitsubishi Motors Corp. in the area of EVs. The maker of the Leaf compact car plans to increase the number of electrified models to 27 by fiscal 2030.
The automaker also aims to put into practical use all-solid state batteries, a next-generation technology expected to significantly boost the range of EVs, by fiscal 2028.
Last year, Nissan decided to invest in Renault's new EV venture Ampere in a bid to widen its EV line-up, but Renault in January called off the plan to list the new firm, citing an unfavorable market environment.
Honda has collaborated with Sony Group Corp. and General Motors Co. over EV development in recent years.
The maker of the Vezel sport utility vehicle said it will make all its new models either EVs or fuel-cell vehicles by 2040.
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