Honda proposed changing the structure of the intended merger from a joint holding company, as agreed initially, to a deal with Honda as the parent company and Nissan its subsidiary through a share exchange. Both companies concluded eventually that it was best to “cease discussions,” the statement added.

The Japanese companies’ decision to call off negotiations highlights the challenges legacy automakers face in partnering to tackle new technologies.

The rumored collapse of merger talks between Honda and Nissan amidst the EV industry's transformation has thrust Foxconn into the spotlight as it continues to explore partnerships with Nissan and Renault.