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The changing competitive environment surrounding electric vehicles is intense. A sense of urgency will determine the success or failure of the comprehensive EV collaboration agreed to by Honda Motor Co. and Nissan Motor Co.
Honda and Nissan have announced that they will fully collaborate in EV production. They will promote cooperation in five areas, including the standardization of the operating system to control computers installed in vehicles and the sharing of key components such as motors and inverters.
Mitsubishi Motors Corp., in which Nissan holds a 34% stake, will also participate in the collaboration.
As a result, the Japanese auto industry will be consolidated into two camps: the group led by Toyota Motor Corp. and the Honda-Nissan-Mitsubishi alliance.
The competitive environment surrounding EVs is rapidly changing. In the Chinese market, where EV production has been promoted as a national policy, Chinese-made EVs are spreading quickly. Japanese automakers have been noticeably struggling due to a sharp decline in sales of gasoline-powered vehicles in China.
The agreement between Honda and Nissan to engage in such close collaboration was likely spurred by a sense of crisis. Huge development costs are a heavy burden. It is hoped that the competition between the two domestic camps will lead to the strengthening of the appeal of Japan’s EVs.
Meanwhile, in major Western countries, EVs are becoming more popular among environmentally conscious users. However, consumers are strongly dissatisfied with their long recharging times and relatively high prices, and the growth in sales volume has slowed, causing European and U.S. manufacturers to review their investment plans.
Tesla Inc. of the United States and BYD Co. of China have garnered an overwhelming share of the global EV market.
It has been pointed out that Japanese manufacturers are lagging behind in EV production, but it can be said that they now have an opportunity to turn the tide for the country.
China has a supply network for vehicle batteries, a key component, and thus enjoys overwhelming cost competitiveness. Honda and Nissan need to develop batteries that can be used by both companies to lower costs.
The development speed of EVs, which have fewer parts than gasoline-powered vehicles, is extremely fast. It is important to discuss how to standardize motors and other drive devices.
Japanese manufacturers have so far enhanced their competitiveness with the strength of the “keiretsu” system. The system comprises a manufacturer of the entire car at the top, with multiple levels of parts makers under its umbrella.
However, the barriers of the manufacturers’ separate keiretsu systems may become an obstacle to collaboration in EVs, where the standardization of parts is important. A reorganization of parts suppliers will be inevitable.
It is also important to develop next-generation vehicles, known as “software defined vehicles.” SDVs are characterized by their ability to improve driving performance and accident prevention functions through software updates. It is hoped that the development of SDVs will be hastened so their introduction can be achieved earlier than the target year of 2030.
