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2026 Subaru Crosstrek ReviewWill the Honda/Nissan Merger Happen?
Merger talks between Honda and Nissan have been in flux for months. Does the ouster of Nissan CEO Makoto Uchida make it more or less likely?
On Again, Off Again… On Again?
Since Honda and Nissan signed on to an MOU, or memorandum of understanding, last December, the possibly of the two merging to form what would be the world’s third largest automaker behind Toyota and Volkswagen has been the subject of intense speculation. The possibilities for both parties are tantalizing with Honda eyeing a leg up in EV and PHEV tech and Nissan getting a desperately needed financial lifeline at a critical juncture. Despite the upsides for both companies, negotiations have been stymied, protracted, and punctuated by drama, including the abrupt departure of Nissan’s CEO Makota Uchida.
With the entire industry in flux and Nissan’s future contingent on a firmer financial footing, will the two Japanese automakers join forces? Or was this marriage of convenience never meant to be?
What Honda and Nissan Stand to Gain
Rewinding back to December of 2024, Honda and Nissan announced a memorandum of understanding outlining what each company would be looking for in a future partnership with a particular emphasis on joint development of EVs and SDVs (software driven vehicles). While EVs were the expressed focus, it was clear at the time that both companies stood to gain a lot more from a partnership than defraying EV development costs.
For Nissan, a merger with Honda would help stave off a slide into insolvency. Nissan is carrying significant debt on its balance sheets with $5.6 billion coming due in 2026. Meanwhile, production is down to 3.5 million units per year, compared to 5.6 million units built in 2018. Nissan’s troubles began with the arrest of CEO Carlos Ghosn in 2018 for financial malfeasance and his eventual absconding from Japanese custody for Turkey. Increased competition on the EV front from Tesla and other legacy automakers plus a reluctance to follow the market pivot to hybrids have left the company flatfooted and struggling in key markets, including in the US.
For Honda, a merger with Nissan would indeed allow collaboration on EVs and PHEVs. More critically, a merger with Nissan would allow Honda to leverage Nissan’s full-size truck chassis, formerly of the Titan and of the current Armada. Even more intriguing are the rumors of Honda’s interest in Mitsubishi Motors, of which Nissan holds a 34 percent stake, which would again direct access to existing PHEV tech but also to Mitsubishi’s expansive presence in Southeast Asia.
Possibly the biggest reason for the proposed merger was the Japanese government itself pushing for some way to prevent a major manufacturer in Nissan from folding.
With so much to gain for both parties, the question is: why hasn’t the deal gone through?
The Twists and Turns of Merger Talks
In a word, pride. While no official accounting has been released, rumors abound that the major sticking point was the expectation on Honda’s part that Nissan would become a subsidiary under a merger. Naturally, such a prospect did not sit well with Nissan’s CEO Makota Uchida, who not only felt such an arrangement undervalued Nissan but, in all likelihood, such an arrangement increased the chances of Uchida and other Nissan executives being let go in the event of a merger of “unequals.”
This is probably why Nissan seemed to drag its heels on the merger. The two companies had opened up their books and expectations were that a potential deal could be finalized in early 2025. The recalcitrance from Nissan’s Uchida looked to have scuttled the $60 billion dollar deal by early February as Honda grew increasingly impatient and potential tariff turmoil offered further complications.
Uchida’s slow walking the deal looks to have earned him walking papers from Nissan’s board as he was swiftly ousted from the company’s top spot in February and replaced by the then Chief Planning Officer, Ivan Espinoza. For his part, Espinoza is offering an honest assessment of where Nissan is, telling InsideEVs that, “We (Nissan) don’t have a cash problem.” With roughly 1 trillion yen ($6.7 billion) in cash on hand against that forthcoming $5.6 billion in debts payable in 2026, Espinoza admitted Nissan has a “cash flow generation problem” i.e., profitability versus expenses. A problem whose possible solution would be finding a partner to help shoulder development cost as Nissan looks to get more competitive vehicles to market.
Will They? Won’t They?
Even with Espinoza as Nissan’s new CEO, it’s unclear whether Honda and Nissan will resume their efforts at a full-scale merger or continue playing footsie, pledging potential future cooperation on EVs.
For its part, Nissan says they are forging ahead with a plan to pull the company back from the brink, without the lifeline of a merger. The third-generation all-electric Nissan Leaf, now a crossover riding the same platform as the Ariya, is slated to enter production in early 2026 along with a belated hybrid version of their best-selling Rogue crossover.
Honda isn’t even the only company looking to swoop in to “rescue” Nissan. Nikkei reported that Foxconn, the Taiwanese manufacturer of iPhones among other products, had approached Renault about “cooperation” regarding their stake in Nissan. It’s also rumored that the Japanese government has floated the idea of Tesla buying out Nissan if a deal can’t be reached with Honda.
For now, it appears we’ll have to wait and see what Nissan does, to soldier on alone or finally pick a suitable dance partner.
