Honda and Nissan confirmed on Thursday that their merger talks have officially ended. The latest development follows our recent report, which highlighted discussions became difficult as Honda proposed making Nissan its subsidiary, deviating from their initial plan of forming a holding company. Mitsubishi, previously part of the discussions, has also released a statement on the matter.

1. Honda shares on the Tokyo Stock Exchange in the green, Nissan stock tanked
2. Renault, which holds a big Nissan stake, is looking for a partner to offload shares

They will, however, continue to collaborate on autonomous driving tech and electric vehicles along with Mitsubishi. Keep reading to get an idea of what led to this and what happens next.

Honda-Nissan merger talks explained

The trail of events dates back to March 2024, when an MoU was signed to develop a common electric powertrain. About five months later, in August, a new MoU was agreed upon to develop EVs, especially SDVs (Software-Defined Vehicles), that use artificial intelligence and have ADAS tech. It was only in December that they discussed coming together and forming the world's fourth-largest automaker by sales, after Toyota, Volkswagen and Hyundai. 

If it had been established, the JV would have allowed the two companies to share more resources and take on Chinese EV brands and Tesla amid increasing global competition. After the announcement, Honda shares were in the green on the Tokyo Stock Exchange, while Nissan shares tanked.

What's next?

It should be noted that Nissan is currently part of a global alliance with Renault and Mitsubishi. Renault, which has a 36 percent stake in Nissan, has reportedly started speaking to iPhone assembler Foxconn about selling its shares in the Japanese brand. Foxconn was rumoured to have entered into discussions with Renault last year, but the latest round of chats started even before the Nissan-Honda merger talks officially collapsed. Other companies like Apple are in the fray, too. Additionally, Nissan is independently scouting for a US-based partner, ideally from the tech sector.