Honda and Nissan to jointly develop components for software-defined vehicles

Honda Motor and Nissan Motor have announced a joint venture to develop and standardize operating systems and other crucial components for software-defined vehicles (SDVs). The agreement is set to come into effect in fiscal 2029, as both companies aim to share the high costs associated with developing these advanced vehicles. The initiative is also aimed at competing with U.S. electric vehicle leader Tesla and Chinese rivals.

The partnership was formed 18 months after Honda and Nissan's business integration talks stalled in February 2025. The worsening business environment, driven by increased competition and hefty U.S. tariffs, has prompted the companies to collaborate more closely. Mitsubishi Motors, a company in which Nissan holds a stake, is expected to join the SDV-related partnership.

Software-defined vehicles allow users to add functions and services through software updates, similar to smartphone apps. This model also enables automakers to generate ongoing service revenues. In addition to the operating systems, Honda and Nissan will jointly develop and standardize components such as electronic control units responsible for various vehicle functions, including braking.

Standardizing these core components and increasing their usage across vehicles will streamline investments, lower procurement costs, and provide more comprehensive driving data.

Both companies plan to leverage their respective technological expertise and personnel to maximize development resources and efficiency. While Honda and Nissan will pursue their own autonomous driving and driver-assistance technologies, including in-car entertainment, they are expected to consider further collaboration in the future, such as vehicle supplies for the North American market.

In fiscal 2025, Honda reported a significant group net loss while Nissan struggled with sales slump, incurring losses for two consecutive years.