Honda Motor and Nissan Motor are expected to finalize an agreement as early as Monday to jointly develop a common operating system and onboard computer for their new automobiles, with deployment anticipated by 2029. This collaboration focuses on software-defined vehicles (SDVs), where functionality can be enhanced and updated through software, moving away from traditional hardware reliance.
The discussions for this software partnership continued even after their extensive merger talks, which aimed to create the world's third-largest automotive alliance, fell through earlier this year due to disagreements over terms. Both companies had initially explored broader collaborations, including SDVs, batteries, and vehicle supply, before the merger discussions.
The move is driven by the soaring costs of software development, which are projected to reach trillions of yen (about $6.8 billion for every 1 trillion yen) as the lines of code in vehicle software are expected to increase sixfold between 2020 and 2030. By standardizing basic software and collaborating on development, Honda and Nissan aim to reduce these costs and better compete with leaders in vehicle software like Tesla and Chinese EV manufacturers such as Huawei Technologies. They also plan to use this common platform, akin to Apple's iOS or Google's Android, to enable new revenue streams through software updates and services.
This partnership also addresses concerns about controlling vehicle data, which is crucial for advancements in autonomous driving and in-vehicle amenities. The global market for SDVs is projected to reach $301 billion by 2034, a sevenfold increase from 2023. Both companies are also exploring standardizing high-performance semiconductor devices and motors, and are adopting gigacasting from 2026 and 2027 respectively to further cut production costs. Honda's CEO Toshihiro Mibe has committed billions of dollars to automotive software as part of a revival plan.
