Nissan and Honda have announced plans to introduce a new electric vehicle (EV) by the end of the decade. The two Japanese carmakers revealed a comprehensive alliance aimed at competing with Tesla and Chinese automakers.

The companies agreed to develop EV software together and supply each other with batteries. Both chief executives mentioned the possibility of a future capital partnership. 

“If we don’t act now, we won’t be able to catch up with the new players.” - said Honda’s chief executive Toshihiro Mibe at a joint press conference in Tokyo. 

The partnership will also involve Mitsubishi Motors, creating a coalition to challenge Toyota, which has alliances with Mazda, Subaru, and Suzuki. Honda has a separate joint venture with Sony, planning to launch a software-focused EV in North America by 2026.

Nissan’s CEO, Makoto Uchida, emphasized that the alliance with Renault in Europe will continue, while the partnership with Honda will focus on other regions.