Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

The merger will create the third-largest car company in the world, after Toyota and Volkswagen. Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining, the companies said.

This move comes as the industry transitions away from fossil fuels and towards electric vehicles, where Japanese companies have lagged behind their rivals.