Nissan shares jump nearly 24% following reports of Honda merger talks

[Daniel Sims]

What just happened? Much of the conversation surrounding electric vehicles has centered on newer automakers like Tesla and BYD, while traditional giants such as Ford and Honda strive to transition from gas-powered vehicles. Honda has spent years attempting to enter the EV market through collaborations, but recent reports suggest that an outright merger may now be on the table.

Sources recently informed Nikkei Asia that Nissan and Honda are moving toward signing a memorandum of understanding to create a joint holding company, with the possibility of negotiating a merger afterward. The report triggered a 23.7 percent increase in Nissan's stock price on the Tokyo Stock Exchange, while Honda's stock fell by around three percent.

Honda sought to dampen speculation that it and Nissan are planning to merge in order to strengthen their positions in the growing electric vehicle market. While the two companies do intend to pool resources for EV development, no concrete decisions have been made.

In response, Honda reiterated its commitments from March and April to share components and AI research with Nissan and Mitsubishi, emphasizing that they are still considering various possibilities. Combined, Nissan and Honda would become the world's third-largest automotive group by sales, behind Toyota and Volkswagen.

Like other traditional automakers, the two Japanese corporations have been somewhat slow to enter the EV market compared to younger, EV-native giants like Tesla and BYD. Elon Musk's US-based company is by far the world's most valuable automaker, and the only one worth over $1 trillion.

Meanwhile, China's BYD, which ranks third with a $108 billion market cap, has disrupted the industry with highly affordable new vehicles. Some of the company's models retail for under $10,000 in certain regions, prompting the US and EU to impose sharp tariffs on Chinese EVs and other clean-energy products. Cost has been a major barrier to EV adoption, with other companies struggling to lower prices.

Honda previously announced plans to cooperate with Sony and GM to develop EVs. The latter initiative aims to produce low-cost vehicles starting in 2027.

The Japanese automaker plans to transition completely to zero-emission vehicles by 2040 and achieve carbon neutrality by 2050. Honda's US-based EV fleet currently includes several hybrid cars and two all-electric SUVs: the 2024 Prologue, starting at $47,000, and the 2025 CR-V Fuel Cell, starting at $50,000. Nissan's current flagship all-electric models include the 2024 Ariya, starting at $39,590, and the 2025 Leaf, starting at $28,140.

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Nissan shares jump nearly 24% following reports of Honda merger talks

 

[Dreadcthulhu]

This news is seriously making me consider shorting Honda; them merging with Nissan might as well be putting a boat anchor around their neck.

 

[Theinsanegamer]

This news is seriously making me consider shorting Honda; them merging with Nissan might as well be putting a boat anchor around their neck.

I doubt it would happen. Nissan has some useful tech, mainly the EV side and the frontier, but that doesnt justify a merger. Better to wait for bankruptcy then pick up the assets cheap.

 

[opckieran]

Both Nissan and Honda have suffered in quality, and both have been very cozy with foreign manufacturers (Nissan is owned by Renault and Honda collabs with GM - YUCK!!). Hoping they’re looking at the Toyota/Mazda relationship as their model for this potential merger.

 

[kiwigraeme]

Both Nissan and Honda have suffered in quality, and both have been very cozy with foreign manufacturers (Nissan is owned by Renault and Honda collabs with GM - YUCK!!). Hoping they’re looking at the Toyota/Mazda relationship as their model for this potential merger.

I don't care about cars, but I was always under the impression a lot of intra-business in the car industry

Not just ford/mazda join ups

ie thought Korean cars used a lot of Japanese motor tech

From a distance, what is unusual is the lack of huge IP battles - so think must be a lot of licensing agreements , or everyone owns something

Maybe here Japaneses conservatism has come to bike them on the bum
One of the reasons Japanese cars are so reliable is they are not racing to make 2025 model than much different from 2024

Funnily enough maybe Chinese companies can help them out. If China can create some of the best battery tech. Japanese attention to detail to integrate and control it, will mean people will still pay a premium over a straight Chinese car.
Don't think controlling the vertical supply chain was a thing in Japan anyway. Sony/Panasonic don't make many of their screens for TVs for example

tl/dr Big car manufacturers have a big incentive to do back room deals with other manufacturers , which probably already happens. Korean, USA, European , Japaneses will all be helping each other to some extent.
If Tesla gets some fantastic battery tech ? will Elon sell it to other companies, probably yes , but at a premium as those factories can be massive

 

[VitalyT]

Thus born Hossan!

 

[J95qRP7]

Thus born Hossan!

Great idea, Vit. Let’s see who can come up with the best/cleverest new entity name for a Honda Nissan merger.

I’m going with “Aids”.

 

[SRB]

It makes sense. EV's are very expensive, just ask Ford. It's great to sell EV's, unless you lose $40k on each one. Ford had the right idea with hybrids, part of the reason they made money on those was mentioned above, they licensed the tech from Toyoda. Why reinvent the wheel? It does happen quite a bit. Everything from licensing the tech/designs to just re-badging components (Mitsubishi engines labeled Hundai, ZF transmissions in many different makes, etc. The problem is that the volume isn't there for what the EV's cost to design and build, given their is a limited market that doesn't have to worry about their limitations. I think Toyota has it right, Hybrids have a much better and wider market appeal.

 

[human7]

I was today years old when I learned that BYD, the third most valuable automakers by market cap, exists.

 

[human7]

Thus born Hossan!

Nice. I prefer Nissanda myself.

 

[VariableSpike]

Honda might want to strongly look at the hollowed out Zombie Mitusbishi Motors turned into after the Nissan takeover (that was hostile after a scandal, but still)
Especially how their connection with Renault has gone and Nissan's pervading result seems to be dragging car companies down the deain at the hands of their effective masters at Renault (though a little less these days since the Ghosn situation)

 

[SpiritCrusher]

Thus born Hossan!

Honsan

 

[nismo91]

I don't find honda attractive anymore. sure 30-10 years ago they are the japanese car to have. reliable, fast but economical engine. anywhere you are you can surely find 90s honda on the road today still driving, probably with severe rust and worn suspension.

then they proceeded with turbocharged engine, something which they haven't done in a long time. at the same time other manufacturers started producing EV long before pandemic but honda with all their techs and money couldn't be bothered to try making some EVs just to keep up with the world.

there is no debate, honda makes great naturally aspirated engine. I understand they wanted to keep making engines. but the problem is you see, they don't exactly design many new engines in the past 15 years. if you don't count the turbocharged L series and K series they almost got nothing. meanwhile in the past 15 years toyota has evolved twice, from their AZ-AR-A25, NZ-NR-M15 series for their popular 4 cylinder non turbo engine.

in other words, they are giving the other manufacturers time to catch-up the very thing they're good at, while at the same time not catching-up on the EV bandwagon which they know they can't do. if they really merge with nissan it's literally putting the nail to the coffin.

 

[OortCloud]

As long as they still make Type R Civics I don't mind what they do. Lapping the Nordschleife in 7.44 puts cars triple its price to shame.

 

[Endymio]

This news is seriously making me consider shorting Honda; them merging with Nissan might as well be putting a boat anchor around their neck.

True enough, but Nissan was recovering quite well under Carlos Ghosn -- until the Japanese government decided to engage in a little lawfare against him, to better ensure Nissan remained a predominantly Japanese firm.