Honda Motor and Nissan Motor are advancing their software collaboration despite the collapse of merger talks, with plans to standardize basic vehicle control software by the late 2020s as they scramble to compete with Chinese automakers and Tesla.
According to Nikkei, The companies have been conducting joint research on software-defined vehicle platforms since August 2024 and will now proceed with developing the technology for mass production. The partnership represents their most concrete collaboration following the termination of December merger discussions over disagreements on terms.
Chinese EV manufacturers have been outpacing Tesla with advanced software features and competitive pricing, while Japanese automakers lag in the software capabilities that increasingly define vehicle value. Chinese companies like BYD have integrated sophisticated driver-assistance systems into even their cheapest models, contrasting with the more limited software offerings from Japanese brands.
The standardized software will control fundamental vehicle functions, enabling both companies to leverage shared development costs and accelerate time-to-market. This builds on broader Japanese industry cooperation, with Toyota also participating in government-backed initiatives to develop software-defined vehicles.
Tesla faces mounting pressure in China from local competitors offering features like in-car projectors and advanced driver assistance at significantly lower prices. Honda and Nissan’s collaboration reflects recognition that individual efforts may prove insufficient against well-funded Chinese rivals backed by government support.
The initiative signals Japan’s automotive industry acknowledging that software capabilities, rather than traditional mechanical engineering, increasingly determine competitive advantage in electric vehicles.
