The companies sold a combined 7.1 million vehicles globally in 2024, a slight decrease from their combined sales of 7.6 million the year before. Together, Nissan and Honda would have been the third largest automaker in the world behind Volkswagen and Toyota.

In a statement, Honda said it was “striving to create new value and maximize the corporate value of each company” in its negotiations. However, according to Nissan, Honda was negotiating an entirely new structure than what both companies had agreed upon when they signed a memorandum of understanding beginning merger discussions.

“Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU, to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange,” Nissan wrote in a statement.

Nissan owns 24% of Mitsubishi, so any proposed merger would include this third Japanese automaker. Last year before the announcement of a proposed merger, the three companies publicized their joint venture in developing electric vehicles and greener technologies.

Honda’s and Nissan’s statements included the commitment that “going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.”

Honda aims to produce only electric and fuel-cell vehicles by 2040. Nissan is slightly less ambitious, with a goal of 60% of its sales being electric and hybrid vehicles by 2030.

Last year, U.S. consumers bought over 1.5 million plug-in and battery electric vehicles, almost a quarter of all-electric vehicles purchased since 2010. The United States is a large part of the market for both Nissan, representing 27% of its 2024 sales, and Honda, representing 37% of its sales that same year.