Automotive expert Mike Caudill appeared on “The Big Money Show” to give his thoughts on why automakers are slowing production of electric vehicles.
Honda and Nissan are reportedly considering a possible merger, and while speculation is rife about what that potential move could mean, experts say rumors of a partnership are not surprising. states.
News of the merger talks, first reported by the Nikkei Shimbun on Tuesday, comes as both Japanese car giants struggle to compete with the world's biggest electric vehicle (EV) makers, including Tesla and Chinese automaker BYD. Ta.
Nissan Motor Co., Ltd. and Honda Motor Co., Ltd. are reportedly in talks toward a merger. (Getty Images/Getty Images)
Neither Honda nor Nissan have confirmed the merger talks, but Brian Moody, editor-in-chief of Autotrader and Kelley Blue Book, said about a year ago that this kind of partnership would be possible because the companies could pool resources and share costs. I expected it to increase further.
In an interview with FOX Business, Moody said it's a different story for smaller brands to go all-electric, but for larger companies, going all-electric is a big undertaking that requires a huge amount of research and development.
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Honda and Nissan are the second and third largest car manufacturers in Japan, respectively, with Toyota leading them both.
Rumors of a possible merger between Honda and Nissan are not surprising (Ryoichi Tsuno/AFP via Getty Images/Getty Images)
The market capitalizations of Honda and Nissan are approximately 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion), respectively.
“A company like Honda may not be able to do that on its own, but at the same time Honda has a very attractive product, so we feel both companies bring something important to the table,” Moody said. he said.
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“But the important thing is to pool your resources and [they] “Don't make bad business decisions because electric vehicle technology is growing, but not as fast as people thought or expected,” he added.
One possible outcome of a possible Honda-Nissan merger could be cheaper EV options, according to Brian Moody (David Paul Morris/Bloomberg via Getty Images/Getty Images)
So what does the merger potentially mean for consumers? Moody said such a deal could help find value in smaller, cheaper electric vehicles.
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“Such mergers and partnerships could even create lower-priced sub-brands,” he said. “Because we hear a lot of people, a lot of consumers, saying, “New cars are too expensive. I can't afford a new car.''
FOX Business' Andrea Margolis and Reuters contributed to this report.
