Nissan, Honda Team Up to Join EV Software Race to Catch Tesla

Nissan, Honda building software-defined EV? The Japanese automakers unveiled a new partnership Thursday as they look to keep up with Tesla and other leaders in the SDV movement.

Nissan, Honda Deepen EV Alliance with SDV

After confirming plans to partner in March, Nissan and Honda are deepening their alliance. The Japanese automakers announced a new agreement to design and develop next-generation software-defined electric vehicles.

Nissan and Honda to work together to popularize electric vehicles, emphasizing software-defined vehicles (SDV).

Like many rivals, both believe that software (including autonomous driving, connectivity and artificial intelligence) “will define the value of vehicles in the future.” Nissan and Honda see the new technology as a “source of competitiveness.”

Nissan and Honda plan to design and develop the technology that will power next-generation SDV platforms. The two companies plan to complete basic research within the next year.

Based on the results, they will “consider the possibility of expanding into mass production.” Nissan and Honda will also develop battery technology and e-Axles to power new global vehicles.

In a separate press release, Mitsubishi announced it was joining the new alliance. “Mitsubishi Motors has unique technologies and experience and works with Nissan as a partner,” said Nissan CEO Makoto Uchida.

Mitsubishi CEO Takao Kato explained: “Collaboration with partners is essential in today’s automotive industry,” where electric vehicles and other technologies are rapidly developing.

Electrek’s Opinion

Given that Japanese car manufacturers are among the biggest delayers in the automotive industry’s transition to electric drive, their decision to cooperate is not surprising.

The partnership between Nissan, Honda and Mitsubishi comes as Tesla and Chinese electric vehicle makers such as BYD continue to expand and gain market share in key global markets, including Japan.

BYD is entering Japan’s seemingly impenetrable auto industry. While domestic automakers like Toyota, Nissan and Honda dominate the market, most imports have historically come from German luxury carmakers like Porsche, BMW and Mercedes-Benz.

While Japan’s imports fell 7% in the first half of 2024, EV imports rose 17%. BYD led the way, with imports increasing 184% year-on-year, according to the Japan Automobile Importers Association.

And that’s just one market. BTD is rapidly expanding into other important overseas markets, such as Thailand, Indonesia, Australia, Brazil and Mexico, which are key to Japanese exports.

Nissan and Honda are deepening their partnership (joined by Mitsubishi) after Toyota, Japan’s largest carmaker, reported a 5% drop in global sales in June.

Toyota’s sales fell 0.9% in the first half of 2024, mainly due to double-digit declines in China, Indonesia and Thailand. The Japanese carmaker blamed a “challenging market environment” and “intense price competition” for the decline.

BYD continues to cut prices, making it harder for foreign automakers to compete. BYD expects the share of joint venture brands to fall from about 40% to 10% in China.

Japanese automakers aren’t the only ones looking to catch up with Tesla and BYD. American automakers like Ford have announced similar plans.

Ford is working on a low-cost EV platform with software at its heart. Ford CEO Jim Farley has repeatedly warned that Tesla and Chinese EV makers are the “ultimate competition.” Farley said last month that he expects many rivals to turn to China for EV platforms.

Source: Nissan, Honda