The Honda-Nissan merger talks have been a bit cryptic. To the public, the move didn’t make sense. I mean, why would Honda—a company known for stability, reliability, and good financial standing—take on the risk of Nissan, which was given “12 or 14 months to survive” in its current state? Surely something else has to be going on.
Welcome back to Critical Materials, your daily roundup for all things electric and automotive tech. Today, we’re chatting about Honda laying out its plan for Nissan, auto suppliers scrambling to avoid tariffs, and China’s EV exports expected to hit a big stall this year. Let’s jump in
30%: Honda Finally Figured Out What It Wants From Nissan
Photo by: InsideEVs
Honda has been playing it coy about its potential merger with Nissan. The company has been fairly tight-lipped about what it gets out of the deal—after all, Nissan hasn’t exactly been doing great lately. This has led to a ton of speculation around the whys of the merger, and fingers all pointing back to a government-pushed deal to save Nissan from the grips of Taiwan’s Foxconn in a white knight-esque ploy. So, it’s fair to say that we all knew there had to be something behind the curtain, right?
Well, Honda is finally laying down its hand on what it gets out of the merger and the details should surprise no one. The Japanese automaker has long faced Titan-sized challenges (no pun intended) in two areas: large passenger vehicles and production scale. It turns out that Nissan is actually really good at both of these things already.
Meet Noriya Kaihara, the man with a long title: Director, Executive Vice President and Representative Executive Officer of Honda. Kaihara recently spoke at a media roundtable held at this year’s Consumer Electronics Show where he addressed merger talks by laying down just what Honda has to gain from the merger. It turns out that Honda is eyeing up Nissan’s full-size vehicles as a potential way to expand its footing in the U.S. market,
Here’s a snippet from Kaihara’s interview:
We are still discussing with Nissan how we will proceed. In the short term, especially in the U.S. market, Nissan has a large class vehicles that we don’t have. So, if maybe we can exchange some of the vehicles, that would also be a benefit for us in the short term. Maybe in the future, we can co-develop those vehicles. But in the short term, if we need we can get some of the Nissan vehicles for Honda as well
You heard that right. Honda has its eyes on the Nissan Titan, Nissan Armada, and Infinity QX80 as a way to scale up its fleet with ease. This gives Honda a whole new customer base with very little development effort on its end and also opens the door for the co-development of these platforms in the future using Nissan’s tried-and-true truck mentality.
Speaking of development, that’s another benefit discussed by Kaihara. The executive also revealed that Honda plans to use the merger as an opportunity to share development costs across both brands, and the first of those costs would be Honda’s all-new operating system named after the late, great ASIMO.
“This would be quite an impact for us from a financial point of view. If we could have Nissan collaboration, we could share the [development costs],” said Kaihara.
Honda expects to debut Asimo OS in 2026 as part of its 0 Series EV launch.
60%: Auto Suppliers Are Scrambling To Move Production To Avoid Tariffs
The auto industry is in this weird state of geopolitical whack-a-mole right now. President-elect Donald Trump just put his quarter in the machine and picked up his mallet of tariffs, threatening each and every player (mole) up and down the automotive supply chain. And with each swing comes an attempt by these companies to dodge the tariffs while navigating complex shifts in policy and an impending trade war. If it’s exhausting to watch, it has to be exhausting to play.
Trump’s promise of blanket tariffs has the industry shaken up right now, especially those who do a lot of sourcing from China where the president-elect has threatened to levy duty fees of at least 60% on goods originating from the country. This has thrown a wrench into an otherwise carefully calibrated supply chain that has finally leveled out after a pandemic uprooted the auto industry less than five years ago.
Speaking of which, that’s a great point to pivot on. Since Covid, automakers and their parts suppliers have been on a roller coaster. Ebbs and flows of demand forced the global supply chain to make wildly inefficient decisions in the name of keeping up order volume. After stabilizing, the Inflation Reduction Act quickly changes certain aspects of the supply chain in order to qualify for federal incentives that would bolster the EV market. And now, with tariffs threatening to artificially inflate the prices of goods, companies are considering domesticating the supply chain if it proves to be the lower-cost option of two price-hiking evils.
“Anyone can do the math,” said Bosch’s North American president, Paul Thomas, in an interview with Reuters. “If it’s 10%, 20%, 60%—you have to say, ‘OK, how many scenarios make sense for that and which ones do we act on?’ We’ve already started on a few of those even before [Trump] will take office.”
Not all companies are considering moving production to the U.S., however. Kaihara, again at a CES roundtable, noted that Honda was considering moving its production from Mexico back to Japan. Currently, Honda exports about 80% of its 200,000 made-in-Mexico vehicles to the U.S., but with Trump threatening to bump up import tariffs for goods imported through Mexico, Honda may find it cheaper to import through its home market.
Other suppliers like Continental are already happy to have built out vast production networks that help them feel “underexposed”—as CEO Nikolai Setzer puts it—compared to competitors. However, that isn’t keeping these companies from also exploring production in North America to avoid tariffs. Setzer told Reuters that the supplier would also localize where it “makes sense,” hinting that protectionism-inflated costs could lead to domestic production of components should the need arise.
That approach, peppering the supply chain outside of just one geopolitical powerhouse, is the real ticket for some. Panasonic Energy’s North American president, Allan Swan, said that moving its supply chain away from being dedicated to China is the “number one objective” of the company at the current time—a key for automakers that have been looking to qualify for the EV tax credit before it’s gone.
90%: China’s EV Exports Expected To Stall In 2025
China’s rise as an EV leader has been meteoric. With vast backing from its government, China’s key EV players have rapidly risen to become some of the most prolific automakers in the world. But as we enter 2025 and dance around the impending geopolitical challenges, its continued dominance in the global electrification market is expected to cause some turbulence.
Let’s rewind a bit and talk about growth. In 2024, China’s car exports are estimated to have hit around 4.8 million units. That’s a 25% year-over-year growth in exports alone, making it the second consecutive year that China has bested Japan as the world’s largest exporter of automobiles. And keep in mind that this is despite massive tariffs being instituted in the U.S., Canada, and the European Union.
Included in that growth is a 24.3% increase in what China calls “New Energy Vehicles,” which is a term that collectively describes both EVs and plug-in hybrids. That seems like a lot, but that growth is actually down compared to 2023’s 36% year-over-year growth. Still impressive, nonetheless. But that being said, 2025’s NEV growth is expected to be a big, fat goose egg at best, according to the China Passenger Car Association (CPCA). And at the center of the blame are tariffs.
China’s silver lining has been its domestic market. NEV sales made up 47.2% of all cars sold in China last year, up from 40.7% in 2023. Likely, this was propped up by a government-laden incentive of $2,800 per vehicle. Between that incentive and a $2,000 incentive for fuel-efficient combustion cars, more than 6.6 million car sales benefited from government subsidies in China last year alone. In 2025, the CPCA predicts that China’s domestic NEV market is expected to cross that coveted 50% barrier and reach 57%.
On the flip side, foreign automakers continue to lose traction inside China. Larger domestic brands like Geely, BYD, and Xiaomi are seeing explosive growth on their home turf, while General Motors, Toyota, and Volkswagen have all experienced significant market shrinkage. Could it be that China is simply better at knowing its own market, or are domestic players really that much better at building EVs than the rest of the world?
It’s going to be difficult to really get an answer to that question, as protectionist tariffs are snuffing out China’s entry to some of the world’s largest auto markets. And for better or for worse, the projected growth slump shows that these global tariffs are expected to work—at least until China’s automakers find a way around them.
100%: Would You Buy A Hondissan Truck?
Photo by: InsideEVs
Honda’s plans to potentially use Nissan’s full-size trucks to complement its lineup just makes sense. I mean, after catching hell for so many years over its unibody Ridgeline, Honda surely has a bit of a sore spot here. So to create a Honda-Nissan full-size truck mashup seems to be a key way for the brand to grow its customer base with very little effort on Honda’s end.
That being said, Honda clearly sees the need to modernize Nissan’s aging platforms with it already looking ahead to modernize a co-developed truck in the future. Or, maybe it just sees the ability to use Nissan’s expertise to develop a truck as another tool in its belt that also benefits from cost-sharing between the brands.
Either way, I’m curious: would you buy a Honda-branded Nissan? And, if so, what would you want to see out of it? Let me know in the comments.
