The proposal urged Nissan to drop e-Power in favor of Honda’s hybrid system.
Honda and Nissan ended merger discussions last week, just two months after agreeing to explore the creation of a joint holding company set to launch in 2026. New details are emerging about why negotiations collapsed, with two major points of contention coming to light. While it was previously reported that Honda sought to make Nissan a subsidiary, another significant request also played a role in the fallout.
According to The Japan News, the English-language section of Yomiuri Shimbun, Honda proposed that Nissan abandon its e-Power hybrid technology in favor of Honda’s own hybrid system. This unusual demand was met with strong resistance, deepening the divide between the two automakers. Despite the failed merger, Honda and Nissan will continue collaborating on electrified vehicle projects.
Nissan Sticks with e-Power, Eyes Third Generation
Nissan remains committed to its e-Power system and is currently developing a third-generation version. As revealed in a recent product roadmap, the next-gen system will be 20% more efficient than the original 2016 version and 15% more fuel-efficient on highways compared to the current second-generation setup. Nissan also aims to reduce costs by 20% from the original system, which debuted in the Note hatchback.
In a major milestone, Nissan plans to introduce e-Power technology to the U.S. market with the Rogue e-Power, set to launch in FY2026 (April 1, 2026 – March 31, 2027). Meanwhile, a plug-in hybrid Rogue will arrive in FY2025 (April 1, 2025 – March 31, 2026). Elsewhere, the third-generation e-Power system will also power Europe’s Qashqai and an upcoming minivan in Japan between FY2025 and FY2026.
How e-Power Differs from Conventional Hybrids
Unlike traditional hybrid systems, e-Power does not directly link its internal combustion engine (ICE) to the wheels. Instead, the gas engine functions as a generator, charging a battery that powers an electric motor, making e-Power vehicles drive more like EVs.
Since its debut in the Note, Nissan has expanded e-Power to several models, including the Kicks, Qashqai, X-Trail, and Sylphy sedan in China. Mazda has adopted a similar approach in the MX-30 hybrid, using a rotary engine as a generator. The brand has even hinted that its long-rumored rotary sports car may use a similar setup, as seen in the Iconic SP concept. Meanwhile, Mazda is developing a two-rotor gas engine for the U.S. market.
Honda Advances Its Own Hybrid Tech
Honda is also making strides with its hybrid technology. The latest e:HEV system, featuring 1.5- and 2.0-liter direct-injection Atkinson-cycle engines, promises a 10% improvement in fuel efficiency for hybrids with the larger engine. Additionally, next-generation hybrids will be 200 pounds lighter than current models.
Honda is targeting a 50% reduction in production costs by 2027 compared to equivalent models from 2018. The Accord Hybrid has already seen a 25% cost reduction over its predecessor.
What’s Next?
With Honda and Nissan going separate ways, each automaker is doubling down on its own hybrid strategy. Nissan remains committed to e-Power, while Honda continues refining its e:HEV system. While a merger is off the table, their collaboration on electrified vehicles is expected to continue in some capacity.
