Nissan, Honda Shares Rise Sharply After EV Tie-Up Plan

By Kosaku Narioka

Shares of both Nissan Motor and Honda Motor shares rose sharply after the carmakers said they are teaming up on electric vehicles as part of efforts to compete with rivals in China and the U.S.

Nissan shares were recently 5.6% higher on Monday morning, while Honda shares were up 2.7%. The Nikkei Stock Average was 2.2% higher.

Honda and Nissan said Friday after market close that they would study ways to work together on EVs, their core parts and software. Early discussions involve the joint procurement and development of components such as batteries, people at the companies said.

Japanese automakers have lagged behind their global peers in shifting to EVs, trailing top players such as Tesla and China's BYD in EV sales.

To develop EVs, many automakers have turned to globe-spanning alliances as a way of pooling development costs and creating economies of scale in manufacturing and parts procurement.

As competition increased with successive vehicle-price cuts and high costs of development and production, some EV makers were forced out of the race.

Nissan and Honda have faced pressure from Japanese officials to work more closely together to achieve economies of scale, people at the companies have said.

Nissan has been reshaping its global strategy following the restructuring of its alliance with Renault and Mitsubishi Motors announced in February last year.

Renault in January canceled the initial public offering of its electric-car unit Ampere, in which Nissan had said it would invest more than $600 million.

In October last year, Honda scrapped a plan to develop a series of lower-priced EVs with General Motors, though they are continuing to work on other projects, including hydrogen systems for vehicles and power generators.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

March 17, 2024 22:39 ET (02:39 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.