Merger efforts between Honda and Nissan might have failed, but the two Japanese automakers aren’t done collaborating. Industry publication Automotive News reports that the companies recently finalized an agreement to jointly develop new technologies for software-defined vehicles, which both automakers need to compete with China and the electric-vehicle heavy hitter Tesla.
The pair announced the agreement Aug. 31, but it has been in the works since 2024. While the details are still being hammered out, the basic idea is that Honda and Nissan will work to create standardized electronic control units and the operating systems to run them. The resulting components are slated to begin showing up in new vehicles from both companies in 2029.
While the companies initially agreed to use Nissan tech as the project’s foundation, the final agreement describes the partnership as “collaborative.” In a statement, the pair said, “The software domain centered on SDVs (software-defined vehicles), which is key to vehicle intelligence and electrification, has been identified as an important area of collaboration, given the rapid pace of technological innovation and the need to strengthen competitiveness.”
Honda and Nissan may also collaborate on electric vehicle components, such as batteries, e-axles, and other parts. Other joint efforts could include parts procurement, software for light vehicles, and deeper AI integrations.
Merger plans between the two companies fell apart in February when Honda proposed taking full control of Nissan. That put Nissan’s future in question, as it has struggled with significant losses and debt in recent years, but Honda didn’t enter the conversation without baggage. It reports its first annual loss for the 2025 fiscal year and has changed course on electrification, cutting the GM-built Prologue and moving toward new hybrid models instead.
