Nissan began merger discussions with Honda in December 2024 after the Yokohama-based automaker's bleak financial situation became apparent at the release of its year-end reports. Since then, it's been openly looking to break ties with its nearly two-plus-decade alliance with France's Renault.

The Japanese companies’ decision to call off negotiations highlights the challenges legacy automakers face in partnering to tackle new technologies.

Less than two months after a potential merger was floated, Honda and Nissan have called the potential partnership off, forcing Nissan, which has been experiencing difficulties, to explore alternate collaborations.