Nissan and Honda discussing partnership on electric cars

Rival Japanese car manufacturers Nissan and Honda are considering a partnership on next-generation electric cars.

The companies have signed a "memorandum of understanding under which they will begin a feasibility study of a strategic partnership in the fields of vehicle electrification and intelligence," Nissan and Honda said in a joint media release.

It confirms a report by Nikkei Asia, citing sources from Nissan who said there is interest in creating a common electric powertrain – or 'e-axle' – for the two manufacturers to share in forthcoming electric vehicles to save cost.

It is also reportedly interested in developing a shared electric-vehicle platform, to compete with lower-cost Chinese competitors such as BYD – though Nikkei Asia says Honda's position on Nissan's proposal is unclear.

BYD’s in-house manufacturing of batteries and other key components in the vehicles is unrivalled by the Japanese brands and brings down the showroom cost of its electric vehicles.

Its competitive prices helped it record a substantial rise in sales last year globally, including growing popularity in Australia.

The possible tie-up with Honda follows a now-scrapped multi-billion-dollar plan for Honda and General Motors to develop an affordable electric car.

According to news outlet Reuters, in 2022 GM and Honda announced they would work together to create an electric vehicle costing less than $US30,000 ($AU45,600) in an effort to combat Tesla’s dominance in the electric-vehicle market.

Nikkei Asia reports Honda and Nissan would reportedly aim to collaborate and use each other’s resources more effectively to compete on cost, targeting the growth of Chinese electric cars in Asia and Australia/New Zealand.

Honda currently has no electric vehicles on sale in the Australian market, while Nissan has sold the Leaf electric vehicle locally for the past 12 years.

Nissan is on track to sell the Ariya electric SUV locally, though no launch timeline has been given by Australian representatives of the brand.