Nissan stock surges 30% amid possible merger with Honda as Japan automakers look to take on Chinese EVs

Nissan Motor
(NSANY)
shares surged 30% Wednesday following a
Nikkeinewspaper
report that the struggling Japanese automaker is in talks with Honda Motor
(HMC)
over a possible merger in a move that could upend the electric vehicles (EV) market. Meanwhile, Honda shares were down about 2.5% in afternoon trading.

Honda and Nissan have
not yet confirmed the deal
, nor have they denied it.

The two are considering operating under a holding company, according to the

Nikkei

article, and will soon sign a memorandum of understanding. That move would enable the Japanese automotive giants to pool their resources to better compete against Chinese EV makers and Tesla.

According to

Nikkei

, Mitsubishi Motors, in which Nissan holds a 24% stake, would also be a part of the future holding company.

Talks of a merger come a month after Nissan
posted poor second-quarter results
and announced it would cut 9,000 jobs and global production capacity by one-fifth.

The potential merger illustrates just how of much a threat Chinese automakers are in the global automotive space, and the impact they are having in the EV market.

In China, more than half of all new cars sold are either fully electric vehicles or hybrids, according to the

Wall Street Journal

, with three in five local consumers buying Chinese brands, and exports soaring at around 4.1 million vehicles.

This post originally appeared at
fastcompany.com


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