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.

If Mitsubishi Motors joins Nissan and Honda, the merger could result in a behemoth worth of about $55 billion based on the market capitalization of all three automakers.

Honda and Nissan are in talks to merge by 2026, they said on Monday, a historic pivot for Japan's auto industry that underlines the threat Chinese EV makers now pose to the world's long-dominant legacy car makers.