Honda Likely Forced to Rethink EV Strategy after Merger Talk with Nissan Fall Apart

By Masato Takamura / Yomiuri Shimbun Staff Writer

16:08 JST, February 6, 2025

Honda Motor Co. will likely be forced to rethink its strategy due to Nissan Motor Co.’s decision to call off their merger talks.

Honda has set a goal of all its new vehicles being electric vehicles or fuel cell vehicles by 2040, but it is said that trillions of yen will need to be invested to achieve this goal. It may be difficult for Honda to bear the huge development costs alone.The merger talks between Honda and Nissan were motivated by their sense of urgency over the rapidly growing presence of U.S. and Chinese EV makers. Honda’s global sales in 2024 were 3.8 million units, down 4.6% from the previous year and below China’s EV giant BYD, which sold more than 4 million units. Honda’s sales in China, where EV sales are rapidly expanding, dropped 30.9% to 850,000 units in 2024.Honda President Toshihiro Mibe said at a press conference last August, “[Emerging makers] are changing faster than we can imagine. If we do things as an individual company, we won’t be able to catch up with them.” He also expressed hope for collaboration with other companies in the EV field. However, Honda’s strategy of strengthening its EV business through merger is back to square one.Will Honda return to the independent path it was founded on? Or will Mibe come up with the next move? Honda’s decision, to be announced by mid-February, will be closely watched.On Wednesday, Honda shares temporarily rose 11.97% to ¥1,552.50 from the previous day, following reports that its merger talks with Nissan would be called off.

Nissan shares were suspended from trading in the afternoon to confirm the veracity of the reports.