Hybrid Vehicles Caused The Nissan-Honda Merger To Fall Apart

Now that the Nissan-Honda merger has officially collapsed, details about why talks unraveled so quickly are emerging.

We already knew Nissan's board balked at Honda's insistence it become a subsidiary, and bristled at the thought of being forced to close factories According to The Japan News, there was another sticking point: Honda wanted Nissan to ditch its e-Power hybrid system and integrate Honda’s hybrid powertrain into its models instead.

According to the report, Honda saw the chance to integrate its hybrid system into Nissan vehicles as an opportunity to increase the sales potential of its system which in turn would increase operational efficiencies and lower production costs from the increased scale. Honda claimed Nissan would benefit from lower procurement costs.

Nissan has heavily invested in its extended range e-Power hybrid tech, and the third-generation e-Power system is already on the way. It's expected to debut in North America later this year and promises 20% more efficiency and 15% better highway fuel economy than the current version—which was never efficient enough at highway speeds for Nissan to offer the system in North America where Honda and Toyota dominate the scene.

Unlike Honda’s more conventional hybrid system, Nissan’s EREV e-Power setup uses a gas engine to charge an onboard battery which then sends power to the drive wheels. Nissan is already selling a version of the system in the Note, Kicks, Qashqai, X-Trail, and Sylphy sedan in China.

The Rogue e-Power hybrid is scheduled to go on sale in North America in 2026 making it the first e-Power model to reach our shores. Before that, the company will release a plug-in hybrid Rogue later this year.

Meanwhile, Honda is pushing ahead with its own hybrid plans. The company recently detailed a new e:HEV system that pairs 1.5- and 2.0-liter direct-injection Atkinson-cycle engines with lighter components and improved efficiency. Honda says its system will achieve a 10% boost in fuel economy, a 200-pound weight reduction, and a 50% cost reduction by 2027 compared to the 2018 equivalent models. Honda has already cut 25% of costs on the latest Accord Hybrid, so it’s making progress. Expect to see the latest version of the system when the Prelude debuts later this year.

Despite the rift, Honda and Nissan will still collaborate on EVs and software.

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