Nissan Bails; Farley Wails – CleanTechnica

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It isn’t easy being in the car business these days. Once, you just bolted some seats onto the floor pan and shoved an engine under the hood and watched as the orders rolled in. But then Jimmy Buffett wrote songs about spending “four lonely days in a brown LA haze,” and people began to wonder if breathing all that crud spewing from the tailpipes of automobiles was good for their health. Then the federal government decided to exceed its authority the way it always does by making manufacturers clean up some of those emissions. Now as the planet warms and electric cars are busting out all over, every automaker is peering into an uncertain future and wishing for the good old days. Nissan and Ford are just the latest companies to wonder where this will all end and whether they will still be around by 2030.

We have reported several times about the on again, off again negotiations between Honda and Nissan. Last December, the two companies announced they were thinking of joining forces. Japanese automakers have been stubbornly resistant to making electric cars. They have investigated every other possible technology — hybrids, fuel cells, moonbeams — and found them all wanting. Despite the roiling of the regulatory waters by the new US administration, the EV revolution is moving forward. In ten years, conventional cars will be as scarce as new diesels in Norway. Nissan was one of the early leaders in battery-electric cars, but it rested on its laurels while others like Tesla and several Chinese companies took the electric car ball and pushed it forward.

Nissan once had its CEO thrown in prison, and things have gone downhill steadily since then. It insisted on using air cooling for its batteries when everyone else was switching to liquid cooling for better control of battery pack temperatures. Where others brought EVs with more range and faster charging to market, Nissan slogged along with cars that offered less range and the obsolete CHAdeMO charging technology. At the same time, the company let its conventional offerings fall behind the competition. Now they are up the creek without a paddle.

Nissan Backs Away From Honda

Honda was their lifeline, but Nissan balked at the terms Honda insisted on as part of the new relationship. Now they are back where they started three months ago. One needs scale to compete on the global stage; the other needs a lifeline to stay afloat, Blooomberg says. Honda CEO Toshihiro Mibe tried to put a positive spin on the news when he told reporters on February 13, 2025 that “while the outcome is unfortunate, we now have a mutual appreciation of our synergies that can be utilized in our existing strategic partnership.” Nissan CEO Makoto Uchida was more direct. “It will still be difficult to survive without leaning on future partnerships,” he said,

When it comes to courting other players, both may find that the pickings are slim and other suitors might not be so amicable. The need to find a partner is particularly acute for Nissan, which has struggled to keep up with the car industry’s seismic changes. “At the end of the day, we still believe that Nissan will need support from another big automaker,” said James Hong, an analyst at Macquarie Securities Korea. “Without that, it seems to be quite a difficult situation for them.”

Honda and Nissan formally ended negotiations on Thursday, the mutual parting a clever way for both to avoid the ¥100 billion ($650 million) breakup fee stipulated by the agreement they signed in December. It also reopens the door for Hon Hai Precision Industry, the Taiwanese iPhone-maker better known as Foxconn, to solidify its pursuit of Nissan as the company ventures into newer arenas such as electric vehicles to offset stalling smartphone sales. Hon Hai Chairman Young Liu said Wednesday he’s open to buying Renault’s 36% stake in Nissan. New interested parties may also enter the picture. KKR is in the early stages of evaluating an equity or debt investment to improve Nissan’s financial position, Bloomberg News reported, citing people familiar with the matter.

Had the merger of Honda and Nissan come together, it would have created one of the world’s biggest carmakers and given both Honda and Nissan the scale to compete globally. Left on their own, however, Honda and Nissan are languishing in eighth and ninth place when ranked by global deliveries, and in danger of being overtaken by China’s Geely Automobile, whose sprawling empire includes brands like Zeekr, Volvo, and Lotus.

Jim Farley Is Not A Happy Camper

Closer to home, Ford CEO Jim Farley is feeling stressed out by the idiocy emanating from Assington, DC about tariffs. During a call with investors this week he said, “So far what we’re seeing is a lot of cost and a lot of chaos. Let’s be real honest. Long term, a 25 percent tariff across the Mexico and Canada borders would blow a hole in the US industry that we’ve never seen, Frankly, it gives free rein to South Korean, Japanese, and European companies that are bringing 1.5 million to 2 million vehicles into the US that wouldn’t be subject to those Mexican and Canadian tariffs. It would be one of the biggest windfalls for those companies ever.” It is fair to say Farley thinks only a jackass would come up with such a harebrained idea, and he is right.

According to the Detroit Free Press, Farley added that here’s a “global street fight” in the auto industry with the transition to electric vehicles and the rapid growth of Chinese automakers across various markets, and that now is the worst possible time for the disruption the tariff scheme would create. “President Trump has talked a lot about making our US auto industry stronger, bringing more production here, more innovation to the US and if his administration can achieve that … it would be one of the most signature accomplishments.” But the 25% tariffs “would be devastating,” he said.

Analysts say Ford has a $35 billion exposure between finished vehicles and parts that move from Mexico and Canada into the United States. Ford CFO Sherry House said the automaker is preparing for potentially higher tariffs by setting up teams throughout the company to study “material flows” as well as Ford’s levels of inventory. “Right now, we’re paused on a lot of the Mexico and Canada tariffs,” House said, but added that Ford is considering where to strategically invest resources and make a small amount of inventory built in key areas “to protect our flow and to protect our customers. But generally speaking, we’re not making a lot of large decisions at this point. We’re waiting to see the impact of what’s going to happen.”

Beyond tariffs, Farley said the potential remains for Trump to repeal parts of the Inflation Reduction Act, such as the $7,500 tax credit for buyers of electric vehicles that has helped many automakers to sell electric cars. The IRA also includes the production tax credit, which allows a business to reduce taxes based on the amount of electricity it generates by solar and other qualifying technologies for the first 10 years of a system’s operation. Ford is building factories to take advantage of the production tax credit, which means a lot of financial pain for Ford if that provision is revoked.

It is hard enough to navigate the transition to electric vehicles given the fierce competition from Chinese automakers, but to get kicked in the teeth by your own government is doubly discouraging. Clearly, Ford did not pay a big enough bribe to the Major Domo Of Mar-A-Loco prior to the election. The oil and gas industries did and have already been amply rewarded. The problem for Ford and others is they still think they are dealing with rational people who make rational decisions. They need to readjust their thinking. The US government is now a criminal enterprise where only those who agree to be shaken down get any satisfaction. Tony Soprano would be proud.