Honda and Nissan are seeking to collaborate on electric vehicles to explore common parts and engage in joint procurement. This initiative comes as the Japanese carmakers endeavour to reduce costs and elbow their way to the frontlines in the global EV race, competing against rivals such as Tesla and emerging entrants from China.

The two companies announced a memorandum of understanding regarding the tie-up at a news conference last Friday. Japanese automakers are re-evaluating EV development and manufacturing strategies, having lagged behind global rivals from China, Silicon Valley, and beyond.

Collaborating with other automakers is viewed as a crucial strategy for achieving scale and sharing investments. Full details regarding the scope of the partnership have yet to be determined.

The companies will establish a feasibility group to study possibilities and report on areas with the best potential within a “short amount of time.”

Honda and Nissan revealed they have no plans to share products or rebadge vehicles. Cooperation is not limited to Japan. Both manufacturers boast extensive operations in North America and Europe where EVs will be necessary to meet regulations.

Both companies are currently small-volume players in the European market. Reducing costs and improving production cadence are seen as key factors for both manufacturers to compete on level terms with Tesla and Chinese rivals.