The rapidly advancing electric vehicle industry often raises more questions than it answers. The Honda-Nissan merger is no different. When complete, it would become the world’s third-largest automaker, but many details remain under wraps. Perhaps they’re waiting for clarity on EV policy after Trump’s inauguration, or maybe the complexities of the merger prevent all answers from surfacing at once.
Still, several key questions remain that Honda and Nissan must address in the coming weeks and months.
Welcome back to Critical Materials, your daily round-up of news and events shaping up an exciting world move away from gas cars. Also on today’s agenda: Sony Honda Mobility will adopt the direct-to-consumer sales model for its newly launched Afeela EV and an update on BYD being accused of “slavery-like” conditions for its factory workers in Brazil; Brazilian officials say BYD brought hundreds of workers to the country on irregular visas.
30%: Honda-Nissan Merger Details To Keep An Eye On
Photo by: Nissan
As a member of a household with five Hondas—my family owns four Honda two-wheelers and the City sedan in India—I am eager to know more about the company’s new merger plans.
One of our Honda two-wheelers, the Activa, has been flawlessly running for 22 years. My brother’s City sedan has 100,000 miles on it. (Although it has a drinking problem.) The company knows a thing or two about building trust and making reliable, long-lasting vehicles.
That’s one important base covered as far as EVs are concerned. It’s one of the reasons why the Prologue is a sales champion despite being made by General Motors.
But Honda needs more than the Prologue’s success to remain relevant in an industry increasingly dominated by Chinese rivals. And Nissan can no longer bank on the early success of the Leaf or the lukewarm Ariya—the latter is actually much better than you think, as InsideEVs recently reported in depth.
Now, what will the ownership and control of the new holding company look like? How will they team up for next-generation batteries and software tech? How do they work together on production challenges?
As for the first question, Automotive News says control of the new company will be based on third-party evaluations and both companies’ average closing prices over a period of time. Honda has the advantage on this front. According to an estimate by Japanese publication Nikkei—assuming Mitsubishi fits in somewhere—we’re looking at a 5-to-1 share ratio in favor of Honda. It would hold 77-78% of the new company, Nissan may end up with 15-16% and Mitsubishi with 6-7%.
Here’s more from Automotive News on leadership, production and technology:
Honda’s leadership has been relatively stable under CEO Toshihiro Mibe, who took office in 2021. Only three years into the job, Mibe will likely stay in the wheelhouse.
If Mibe assumes the top role at the holding company, who would replace him as the operational leader of Honda, and what becomes of Nissan’s top brass?
The big question is what lines will be shuttered and which manufacturing techniques, Nissan’s or Honda’s, will be adopted going forward? And, which suppliers will be the chosen few?
Honda is arguably ahead in making its dreams reality. It has begun building North American EV production hubs in Ohio and Ontario. It has running prototypes of its next-generation 0 Series electric vehicles. And in 2025, it starts verifying solid-state battery production.
With Honda in the lead, its programs will likely hold sway.
This merger is monumental in scope. Its complexity means we won’t have all the answers immediately.
However, with China’s global dominance looming and the unprecedented challenges of scaling up the EV business while crafting a compelling value proposition beyond the “good for the planet” narrative, Japanese automakers have a chance to emerge as late bloomers in the EV race. Now, here’s hoping that they also get the regulatory certainty that they deserve.
60%: Sony Honda Mobility Adopts The Direct-To-Consumer Sales Approach
Photo by: Honda UK
Sony Honda Mobility launched its high-anticipated Afeela electric sedan at CES 2025 on Tuesday in Las Vegas, Nevada. The company will adopt a direct-to-consumer sales method similar to Tesla, Lucid and Rivian—circumventing the dealership experience entirely.
The Afeela 1 will come in two variants, Signature and Origin. Deliveries of the $102,900 Signature begin first, starting in mid-2026. The less expensive version will go on sale in 2027. So, we’re still a while away from seeing these cutting-edge models on the streets.
The direct-to-consumer sales model may witness some dealer resistance since Honda relies on a vast dealer network. Scout is facing a similar backlash from Volkswagen dealers. And the Afeela 1 will also be manufactured at Honda’s Ohio production hub, where most popular models, like the Accord and CR-V are made.
Customers will be able to visit showrooms to experience and test-drive these cars. Here’s more from Automotive News:
In addition to leveraging its website for reservations and sales, Sony Honda Mobility will open two physical locations in the second half of the year where consumers can take delivery of their Afeela 1.
The first and second delivery points – each referred to as an Afeela Studio and Delivery Hub – will be in California, in Torrance and in Fremont, providing coverage to both the southern and northern regions of the state.
The studios also will serve as Afeela showrooms where customers can test drive the EV.
“The Afeela 1 will be on display so visitors will be able to experience the brand and interact with the actual Afeela 1 vehicle,” Yamaguchi said. “Their questions will be answered by experts with extensive knowledge of its innovative features.”
This is an expensive car and it’s unclear if it will move the needle for the broader EV industry. But for $100,000, you get a lot of car. The Afeela 1 has up to 40 sensors, including Lidar for autonomous driving (whenever that becomes a reality) and even a built-in PlayStation 5. InsideEVs has an excellent walkaround of the Afeela from New York City ahead of CES 2025. Be sure to check it out.
90%: BYD Brought Workers To Brazil On Irregular Visas: Report
BYD’s alleged labor violations in Brazil are continuing to unfold in unexpected ways.
Last December, Brazilian officials accused BYD of “slavery-like” conditions for its workers at an upcoming factory in the country, according to a Reuters investigation. BYD denied the allegations, saying this was a public smear campaign by “foreign forces.” The blame was also pointed to a construction contractor named Jinjiang.
A Brazilian labor inspector has now told the news agency that BYD brought more than a hundred workers on irregular visas. The country’s Ministry of Labor may fine BYD for each worker found in allegedly degrading working conditions.
A final investigation is pending, but the allegations are serious. The report added that the workers had to clock long hours and request permission to leave lodging. A separate BBC story noted that the workers had to sleep on beds without mattresses and share one bathroom for every 31 members.
BYD is cooperating with the local authorities and has pledged to comply with the country’s labor laws, the report adds.
100%: Will More Automakers Team Up?
Photo by: Stellantis
The era of consolidation in the auto industry started last decade when France’s Group PSA merged with Fiat Chrysler Auto to form Stellantis, which now has 14 brands under its umbrella, including Dodge, Ram, Jeep and Peugeot. The automotive world order is changing in ways we never imagined, with Chinese automakers seemingly unstoppable and electrification posing fresh challenges. The Honda-Nissan alliance marks the beginning of yet another chapter.
Which other automakers might benefit from a strategic partnership? Share your thoughts in the comments.
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