The auto industry is marked by fierce competition. Yet with automakers forced to balance investments in new technologies like electric vehicles (EVs), autonomous vehicles (AVs), and fuel cells with updates to their current portfolios, collaboration has become essential, too. Even the largest global automakers don’t have enough scale to make all of the necessary investments without putting pressure on their earnings and cash flow.
Some automakers have used mergers and acquisitions to gain scale. In other cases, they have turned to partnerships rather than full-blown mergers. Last week, General Motors (NYSE:GM) and Honda Motor (NYSE:HMC) announced a broad alliance in the North American market to boost their profitability there.
GM and Honda have worked together on various projects for more than two decades. However, they have deepened their relationship considerably over the past several years.
In June 2018, GM and Honda agreed to collaborate on EV batteries, with