The failure of Honda and Nissan to agree on merger terms was reportedly due to an ego clash between the Japanese titans, with a debate over whose hybrid technology to use at the centre of the friction.
As previously reported, the merger was called off last week, with Nissan not wanting to become a subsidiary of Honda and instead demanding to be treated as an equal.
Nissan insiders told Japanese newspaper Yomiuri Shimbun the thought of not being given equal footing by Honda was an “insane decision”, effectively leading to the collapse of the merger.
However, the outlet additionally reports word from other insiders that Nissan was also put off after allegedly being told by Honda to ditch its e-Power hybrid technology.
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Nissan’s e-Power system – available in Australia in the X-Trail and Qashqai – sees a petrol engine charge a small on-board battery, which in turn powers electric motors that turn the wheels.
Honda reportedly wanted Nissan to move to its more traditional hybrid system, in which the petrol engine can power the wheels in tandem with transmission-mounted electric motors.
“It’s self-evident that we have an edge when it comes to hybrids,” a Honda official told Yomiuri Shimbun.
Another insider, speaking to Automotive News on the condition of anonymity, claimed Nissan had spent more than US$2 billion (A$3.14 billion) on developing e-Power powertrains.
They also offered a blunt assessment of why the relationship broke down, saying: “It was a clash of egos”.
A conventional hybrid system (left) compared to Nissan’s e-Power (right)
Automotive News notes that while Nissan’s e-Power tech is sold in Europe, Asia and Australia, it’s not due to arrive in the US until 2026, when an e-Power version of the Rogue (the North American twin to the X-Trail) launches.
According to the publication, the average speeds driven by US motorists make the e-Power system less efficient than when it’s used in stop-start traffic in regions such as Japan.
While there is a new generation of e-Power on the way, Nissan is fighting to stay alive before it can launch.
The latest report emerged a day after the Financial Times reported Honda was interested in restarting merger talks, but only if Nissan CEO Makoto Uchida resigns.
Uchida-san is reportedly facing pressure from his own board as well as partner Renault after merger negotiations broke down.
Honda was reportedly frustrated with the speed of Nissan’s restructuring as well as the depth of its financial troubles.
Its CEO, Toshihiro Mibe, had previously said Nissan getting its financial house in order was a “prerequisite” for the merger.
Following the announcement that the merger wouldn’t go ahead, Nissan said it would undertake major cost-saving measures in a bid to recover 400 billion Yen ($4.14 billion) by the 2026 Japanese fiscal year.
For context, its operating profit slid from 478.4 billion Yen ($4.69 billion) in April to December 2023 to 64 billion Yen ($663 million) across the same period in 2024. Its net income also dropped by 320.2 billion Yen ($3.3 billion) to 5.1 billion Yen ($52.8 million).
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