Honda, Nissan discussing EV partnership to compete in China

Automakers Honda (HMC) and Nissan (NSANY, 7201.T) have reportedly been in talks to enter into a strategic partnership to take on the major EV players rising to prominence the Chinese market. Yahoo Finance Live breaks down the two auto companies' desires to scale up operations through this potential partnership

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Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Nissan and Honda, they are considering entering a strategic partnership to develop new EV technology to compete in the China-dominant clean tech market. Now, according to statements by Honda's president made earlier today, the companies are entering into discussions or entered into discussions in mid January and will decide if a joint venture is on the table for the future. The reason behind this is scale.

And going back to what we were just talking about with Fisker, although a totally different scenario and discussion that's playing out here between Nissan and Honda. But it gets to this a similar point, which is scale and the ability to compete in what is already a very competitive landscape. And within the recent statements that have been released, Nissan CEO saying that emerging players are very aggressive and are making inroads and incredible speed, we cannot win the competition as long as we stick to conventional wisdom and a traditional approach. So they're taking the non-traditional approach, a potential partnership here, in order to better position both of these companies to be able to capitalize and really attract some of that demand that's out there.

BRAD SMITH: Yeah, could be looking at a new major Japan-based partnership as well, and we'll see how that services the rest of the world here. You're taking a look at the stock price action over the past five days here on that far right and then today's activity that has both of them up single-digit percentages.