Japanese auto giants Honda and Nissan on Monday agreed to launch talks on a merger seen as a bid to catch up with Chinese rivals and Tesla on electric vehicles.

With this planned merger, the top Japanese car titans will lead to creating the third-largest automotive company in the world, and they also have Nissan alliance member, Mitsubishi Motors, also looking to join the deal to form this new auto superteam.

The Japanese car giants say the proposed merger would give them the scale to better compete on the global market.

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

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.

Japanese automakers Honda and Nissan have announced plans to work toward a merger that would form the world’s third-largest automaker by sales, as the industry undergoes dramatic changes in its