Nissan and Honda, two leading Japanese automakers, revealed plans on Friday to potentially collaborate in the electric vehicle sector.

This initiative comes in response to what they termed a ‘once-in-a-century’ transformation in the automotive industry.

The move is seen as an effort to catch up with Chinese rivals who have surged ahead in electric vehicle technology. While Japanese manufacturers have focused on hybrid vehicles, Chinese competitors have capitalized on innovative products and pricing strategies.

Nissan CEO Makoto Uchida emphasized the need to break away from traditional approaches to remain competitive in the rapidly evolving automotive landscape.

The proposed partnership aims to encompass various aspects of electric vehicle development, including software platforms, core components, and complementary products. Reports suggest potential collaboration on a common EV powertrain and battery procurement.

Honda CEO Toshihiro Mibe echoed sentiments about the industry’s transformative phase, stressing the importance of synergy between their respective technologies. The goal is to create new value and establish leadership in the automotive sector.

Despite the popularity of hybrid vehicles in Japan, the country has lagged in the adoption of purely electric vehicles. Only a small fraction of cars sold in Japan are electric, compared to more significant figures in Europe, the United States, and particularly China.

The rise of electric vehicles in China has reshaped global automotive dynamics, with Chinese firms now leading in production and export. This shift has prompted Japanese automakers to reassess their strategies and seek partnerships for sustained growth.

Both Nissan and Honda are reportedly considering reducing production capacity in China due to declining sales. Analysts suggest that partnerships could provide opportunities for increased profitability amid market challenges.

While the historical rivalry between Nissan and Honda exists, the potential collaboration is viewed as a pragmatic move. The announcement comes amidst the ongoing restructuring of alliances within the automotive industry.