Mint Quick Edit | Can a Honda-Nissan merger secure an EV boost?

If charging infrastructure sprouts globally, direct switchovers to EVs may accelerate, leaving them further behind in the race.
If charging infrastructure sprouts globally, direct switchovers to EVs may accelerate, leaving them further behind in the race.

Summary

  • Japan’s second and third largest carmakers may merge to form the world’s No. 3 automaker in a bid to take on Chinese electric vehicles. Do Japanese players, including Toyota, need to rethink their hybrid bet?

Could Japanese carmakers rally together to push the pedal on electric vehicles (EVs), a fast-emerging market in which they lag their overseas rivals? Honda and Nissan are reported to be exploring a merger. The two are Japan’s second- and third-largest carmakers, respectively.

In March, the duo forged an EV partnership. While their headquarters only confirm further talks, Nissan’s biggest shareholder Renault is said to be open to the idea and now stock markets seem to be betting on the two merging to form a $54 billion business, the world’s third biggest auto group by sales after Toyota and Volkswagen.

Also read: The China shock behind the Honda-Nissan merger talks

Nissan’s stock zoomed while Honda’s slid, a sign of it being interpreted as a Nissan bailout. Faced with Chinese EVs zipping ahead, Japanese carmakers must decide whether to abandon their big bet that hybrids would lead the auto sector’s conversion to clean energy.

If charging infrastructure sprouts globally, direct switchovers to EVs may accelerate, leaving them further behind in the race.

Also read: The end of EVs is here: Fact or fiction?

As in Formula 1, bends along the track often reshuffle the top order. A carbon shock could yet take away the competitive edge that an oil shock gave Japanese carmakers half a century ago.

Also read: Will new incentives smoothen the EV ride?

 

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