The decision, announced in a joint statement, comes after issues over leadership structure and financial instability, particularly on Nissan’s end.

Why the Deal Fell Apart

Honda, which has maintained stronger financial footing than Nissan, pushed to revise the original agreement. The initial plan was to establish a joint holding company, but Honda later proposed a new structure that would make it the parent company while Nissan became a subsidiary through a share exchange. 

Nissan, fighting with declining sales and a shrinking market capitalisation, was hesitant to accept this change in power dynamics.

According to Japan’s Asahi Shimbun, Honda executives grew more frustrated with Nissan’s sluggish progress in restructuring discussions. 

Nissan’s internal challenges, including weak financial performance and management instability, further complicated negotiations. 

While the deal was initially seen as a strategic move to counter rising competition from Chinese electric vehicle (EV) makers, the inability to align on a clear integration plan proved to be a stumbling block.

Beyond corporate disagreements, market volatility and the transition to electrification also impacted the decision to abandon the merger. Honda and Nissan have been losing market share in China, where competition from lower-cost EV manufacturers like BYD has increased. 

The merger was intended to bolster both companies’ ability to compete, but without a solid foundation of internal stability, the risks outweighed the potential benefits.

Nissan has been facing financial stress for years, with its market valuation now only a fraction of Honda’s. As part of its restructuring plan, the company recently announced a reduction in global production capacity by approximately 20% by the end of the 2026 fiscal year. 

This includes plans to cut its workforce by around 6,500 employees and scale down operations at several plants, including those in the U.S.

Even with the collapse of the merger, Nissan is not ruling out future partnerships. The company confirmed that it is seeking strategic alliances, with Taiwanese electronics giant Foxconn already in discussions about potential collaboration. 

Added to these, there is speculation that Nissan may partner with a tech firm to strengthen its EV development, mirroring Honda’s joint venture with Sony.

Limited Collaboration Moving Forward

While the full-scale merger has been abandoned, Honda and Nissan have confirmed that they will continue working together in a limited capacity.

The two automakers had already agreed to collaborate on software and electrified vehicles earlier this year, and this partnership will proceed despite the failed merger talks.

This strategic expansion enables the company to meet the rapidly increasing demand for electric motorcycles in the country, where over 1,100 Ampersand e-motos are already in operation.

The new factory spans 21,000 square metres, making it over three times larger than the previous 6,500 square metre site.

This significant upgrade, coupled with the deployment of over 100 staff, will allow Ampersand to assemble up to 60 electric motorcycles per day, or 1,440 per month, as well as to continue delivering the most trusted battery swap network for Kenya’s millions of commercial motorcycle riders.

Ampersand’s sustainable EV solutions cut carbon emissions and offer significant savings to riders. Every Ampersand e-moto avoids at least 2 mt CO2e per bike per year and, on average, increases customer income by 45% annually, a vital benefit for Kenyan riders, who each support an average of 3.8 people at home. 

The enhanced Kenyan operation, combined with Ampersand’s successful model in Rwanda where it has spearheaded the adoption of electric motorcycles, lays a strong foundation for its continued expansion across East Africa. 

Currently, Ampersand’s fleet of heavy-duty commercial e-motos and smart, AI-optimised battery fleet covers over 4.5 million kilometres per week in Kigali and Nairobi combined. 

This latest scaling positions the company to meet the growing demand for electric motorcycles, not just in Kenya but across East Africa, where 100 million people depend largely on petrol motorcycles for taxi or delivery services. Ampersand aims to deploy 5 million electric motorcycles by 2033.

Josh Whale, CEO, Ampersand, said: “Our new Nairobi factory is a major step forward in both scale and impact. It reflects our dedication to providing sustainable, affordable EV solutions that directly benefit riders and the environment. With this expanded capacity, we’re in a stronger position to support the electrification of Africa’s commercial motorcycle transport and to scale Ampersand’s proven business model.”