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Fight back against Tesla and BYD. Nissan and Honda will collaborate on more affordable electric cars

Fight back against Tesla and BYD. Nissan and Honda will collaborate on more affordable electric cars
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The second and third largest car manufacturers in Japan are delaying their historical fierce rivalry, preparing for the upcoming wave of high-tech affordable models from China.

As reported by Electrek, Nissan and Honda have announced that they are considering a "strategic partnership" to collaborate in the production of key components for electric vehicles and artificial intelligence in automotive software platforms.

The goal is to reduce costs for electric vehicles, as competition has intensified with the emergence of Chinese players. Car manufacturers like BYD benefit from their own supplies of such components as batteries, which make up a significant part of the cost of an electric vehicle.

Nissan's CEO Makoto Uchida said that "it is important to prepare for the growing pace of mobility transformation in the medium and long term" and explained that partnership with Honda is "important", considering that they "face common challenges". Honda's CEO Toshihiro Mibe says that the company will see if the combination of technologies and knowledge allows them to "become industry leaders by creating new values".

Considering Nissan's intention to switch to a unified transmission for electric vehicles, car manufacturers may join forces for joint procurement to reduce expenses. They may also collaborate on creating a new common platform for electric vehicles.

Meanwhile, after dominating the domestic market, BYD has begun its expansion abroad. In early 2024, the company declared "war" on gas-powered cars by reducing prices of electric vehicles to $10,000.

According to BYD, the low prices "directly disrupt" all the advantages of cars produced by joint ventures. This applies to Nissan and Honda — Nikkei reports that they are sharply reducing production in China after trying not to fall behind. The companies are losing market share, which accounts for 10% to 20% of their net profit in the region.

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