The Honda-Nissan merger talks have been a bit cryptic. To the general public, the transfer did not make sense. I imply, why would Honda—an organization identified for stability, reliability, and good monetary standing—tackle the chance of Nissan, which was given “12 or 14 months to outlive” in its present state? Certainly one thing else must be occurring.
Welcome again to Essential Supplies, your each day roundup for all issues electrical and automotive tech. As we speak, we’re chatting about Honda laying out its plan for Nissan, auto suppliers scrambling to keep away from tariffs, and China’s EV exports anticipated to hit a giant stall this yr. Let’s bounce in
30%: Honda Lastly Figured Out What It Desires From Nissan
Picture by: InsideEVs
Honda has been taking part in it coy about its potential merger with Nissan. The corporate has been pretty tight-lipped about what it will get out of the deal—in any case, Nissan hasn’t precisely been doing nice these days. This has led to a ton of hypothesis across the whys of the merger, and fingers all pointing again to a government-pushed deal to avoid wasting Nissan from the grips of Taiwan’s Foxconn in a white knight-esque ploy. So, it is truthful to say that all of us knew there needed to be one thing behind the scenes, proper?
Nicely, Honda is lastly laying down its hand on what it will get out of the merger and the small print ought to shock nobody. The Japanese automaker has lengthy confronted Titan-sized challenges (no pun supposed) in two areas: massive passenger automobiles and manufacturing scale. It seems that Nissan is definitely actually good at each of this stuff already.
Meet Noriya Kaihara, the person with an extended title: Director, Govt Vice President and Consultant Govt Officer of Honda. Kaihara just lately spoke at a media roundtable held at this yr’s Client Electronics Present the place he addressed merger talks by laying down simply what Honda has to realize from the merger. It seems that Honda is eyeing up Nissan’s full-size automobiles as a possible method to increase its footing within the U.S. market,
This is a snippet from Kaihara’s interview:
We’re nonetheless discussing with Nissan how we are going to proceed. Within the brief time period, particularly within the U.S. market, Nissan has a big class automobiles that we do not have. So, if possibly we are able to alternate among the automobiles, that may even be a profit for us within the brief time period. Possibly sooner or later, we are able to co-develop these automobiles. However within the brief time period, if we want we are able to get among the Nissan automobiles for Honda as effectively
You heard that proper. Honda has its eyes on the Nissan Titan, Nissan Armada, and Infinity QX80 as a method to scale up its fleet with ease. This provides Honda a complete new buyer base with little or no growth effort on its finish and likewise opens the door for the co-development of those platforms sooner or later utilizing Nissan’s tried-and-true truck mentality.
Talking of growth, that is one other profit mentioned by Kaihara. The manager additionally revealed that Honda plans to make use of the merger as a chance to share growth prices throughout each manufacturers, and the primary of these prices can be Honda’s all-new working system named after the late, nice ASIMO.
“This may be fairly an affect for us from a monetary perspective. If we may have Nissan collaboration, we may share the [development costs],” mentioned Kaihara.
Honda expects to debut Asimo OS in 2026 as a part of its 0 Collection EV launch.
60%: Auto Suppliers Are Scrambling To Transfer Manufacturing To Keep away from Tariffs
The auto business is on this bizarre state of geopolitical whack-a-mole proper now. President-elect Donald Trump simply put his quarter within the machine and picked up his mallet of tariffs, threatening each participant (mole) up and down the automotive provide chain. And with every swing comes an try by these firms to dodge the tariffs whereas navigating advanced shifts in coverage and an impending commerce struggle. If it is exhausting to look at, it has to be exhausting to play.
Trump’s promise of blanket tariffs has the business shaken up proper now, particularly those that do quite a lot of sourcing from China the place the president-elect has threatened to levy obligation charges of no less than 60% on items originating from the nation. This has thrown a wrench into an in any other case fastidiously calibrated provide chain that has lastly leveled out after a pandemic uprooted the auto business lower than 5 years in the past.
Talking of which, that is a terrific level to pivot on. Since Covid, automakers and their components suppliers have been on a curler coaster. Ebbs and flows of demand compelled the worldwide provide chain to make wildly inefficient selections within the title of maintaining order quantity. After stabilizing, the Inflation Discount Act shortly adjustments sure facets of the provision chain as a way to qualify for federal incentives that may bolster the EV market. And now, with tariffs threatening to artificially inflate the costs of products, firms are contemplating domesticating the provision chain if it proves to be the lower-cost possibility of two price-hiking evils.
“Anybody can do the maths,” mentioned Bosch’s North American president, Paul Thomas, in an interview with Reuters. “If it is 10%, 20%, 60%—it’s important to say, ‘OK, what number of eventualities make sense for that and which of them will we act on?’ We have already began on a number of of these even earlier than [Trump] will take workplace.”
Not all firms are contemplating shifting manufacturing to the U.S., nevertheless. Kaihara, once more at a CES roundtable, famous that Honda was contemplating shifting its manufacturing from Mexico again to Japan. At the moment, Honda exports about 80% of its 200,000 made-in-Mexico automobiles to the U.S., however with Trump threatening to bump up import tariffs for items imported by Mexico, Honda might discover it cheaper to import by its residence market.
Different suppliers like Continental are already pleased to have constructed out huge manufacturing networks that assist them really feel “underexposed”—as CEO Nikolai Setzer places it—in comparison with opponents. Nonetheless, that is not maintaining these firms from additionally exploring manufacturing in North America to keep away from tariffs. Setzer advised Reuters that the provider would additionally localize the place it “is smart,” hinting that protectionism-inflated prices may result in home manufacturing of elements ought to the necessity come up.
That strategy, peppering the provision chain exterior of only one geopolitical powerhouse, is the actual ticket for some. Panasonic Vitality’s North American president, Allan Swan, mentioned that shifting its provide chain away from being devoted to China is the “primary goal” of the corporate on the present time—a key for automakers which have been seeking to qualify for the EV tax credit score earlier than it is gone.
90%: China’s EV Exports Anticipated To Stall In 2025
China’s rise as an EV chief has been meteoric. With huge backing from its authorities, China’s key EV gamers have quickly risen to develop into among the most prolific automakers on the earth. However as we enter 2025 and dance across the impending geopolitical challenges, its continued dominance within the world electrification market is predicted to trigger some turbulence.
Let’s rewind a bit and speak about progress. In 2024, China’s automobile exports are estimated to have hit round 4.8 million models. That is a 25% year-over-year progress in exports alone, making it the second consecutive yr that China has bested Japan because the world’s largest exporter of cars. And take into account that that is regardless of large tariffs being instituted within the U.S., Canada, and the European Union.
Included in that progress is a 24.3% improve in what China calls “New Vitality Autos,” which is a time period that collectively describes each EVs and plug-in hybrids. That looks like so much, however that progress is definitely down in comparison with 2023’s 36% year-over-year progress. Nonetheless spectacular, nonetheless. However that being mentioned, 2025’s NEV progress is predicted to be a giant, fats goose egg at finest, in accordance with the China Passenger Automobile Affiliation (CPCA). And on the middle of the blame are tariffs.
China’s silver lining has been its home market. NEV gross sales made up 47.2% of all vehicles bought in China final yr, up from 40.7% in 2023. Doubtless, this was propped up by a government-laden incentive of $2,800 per car. Between that incentive and a $2,000 incentive for fuel-efficient combustion vehicles, greater than 6.6 million automobile gross sales benefited from authorities subsidies in China final yr alone. In 2025, the CPCA predicts that China’s home NEV market is predicted to cross that coveted 50% barrier and attain 57%.
On the flip aspect, international automakers proceed to lose traction inside China. Bigger home manufacturers like Geely, BYD, and Xiaomi are seeing explosive progress on their residence turf, whereas Common Motors, Toyota, and Volkswagen have all skilled important market shrinkage. May or not it’s that China is just higher at understanding its personal market, or are home gamers actually that significantly better at constructing EVs than the remainder of the world?
It’ll be tough to actually get a solution to that query, as protectionist tariffs are snuffing out China’s entry to among the world’s largest auto markets. And for higher or for worse, the projected progress droop exhibits that these world tariffs are anticipated to work—no less than till China’s automakers discover a approach round them.
100%: Would You Purchase A Hondissan Truck?
Picture by: InsideEVs
Honda’s plans to probably use Nissan’s full-size vehicles to enhance its lineup simply is smart. I imply, after catching hell for therefore a few years over its unibody Ridgeline, Honda absolutely has a little bit of a sore spot right here. So to create a Honda-Nissan full-size truck mashup appears to be a key approach for the model to develop its buyer base with little or no effort on Honda’s finish.
That being mentioned, Honda clearly sees the necessity to modernize Nissan’s growing older platforms with it already looking forward to modernize a co-developed truck sooner or later. Or, possibly it simply sees the power to make use of Nissan’s experience to develop a truck as one other device in its belt that additionally advantages from cost-sharing between the manufacturers.
Both approach, I am curious: would you purchase a Honda-branded Nissan? And, if that’s the case, what would you need to see out of it? Let me know within the feedback.
