How Japan's carmakers are fighting back against China and Tesla: Nissan, Honda and Mitsubishi gearing up to battle cheap and popular electric cars such as the BYD Seal, MG4 and Tesla Model Y

Japan’s carmakers are mounting a comeback in the face of stiff competition from new Chinese competitors and Tesla.

The nation’s carmarkers were at the forefront of electrification several decades ago after pioneering hybrids and selling some of the earliest electric cars.

That has all changed as Japan's biggest car brands have left EV development to collect dust on the shelf, giving Tesla and brands such as BYD and Geely owned Polestar, Volvo and Zeekr the advantage.

Now Mitsubishi will join forces with Nissan and Honda to combat the advances of the booming upstarts.

The new alliance will enable the three companies to work together to develop software to run electric cars, according to business journal Nikkei Asia.

Electric car software can be one of the largest headaches for carmakers. Volkswagen Group – one of the world’s largest car companies –has struggled to perfect the software needed to make its EVs a success.

This has led to blown budgets, delayed models and subpar sales.

VW has invested $1.5b in US EV start-up Rivian with the potential to invest up to $7.5b. Rivian is known for its excellent electric car hardware and software, which could bail VW out of its tech jail.

Nissan Leaf.

VW's move shows just how important, complicated and expensive developing electric car software is and why the three Japanese brands are joining forces.

The new alliance splits the Japanese car makers into two groups, with the newly joined trio facing off against the Toyota led alliance that brings together Daihatsu, Hino, Mazda, Suzuki and Subaru.

Honda, Nissan and Mitsubishi only have a handful of EVs on sale globally.

Nissan has the Ariya mid-size SUV, which is blocked from sale in Australia, and it is phasing out the slow-selling Leaf hatchback to be replaced with a new SUV version in the future.

Honda has a range of EVs for China and an EV version of the HR-V sold in Europe.

Honda HR-V.

Mitsubishi has no current electric cars outside of its EV kei cars in Japan, but it has announced plans to bring a range of electric cars and hybrids to market in the second half of this decade. 

The addition of Mitsubishi to the line-up is likely to help Nissan and Honda develop plug-in hybrid vehicles. 

Mitsubishi has been one of the leaders in developing the increasingly popular petrol-electric tech.

It’ll also help bulk up the trio’s supply chain and expertise in utes, too, according to Nikkei Asia.