Honda and Nissan will team up to develop electric cars, days after Volkswagen said it may collaborate with Renault, as traditional carmakers combine forces in the face of the threat from Chinese EVs. Japan’s second- and third-largest carmakers putting aside their historic bitter rivalry comes as the established industry is bracing itself for the coming wave of high-tech, low-cost models from China.

“The rise of emerging players is becoming faster and stronger. Companies that cannot respond to the changes will be wiped out,” said Honda’s president Toshihiro Mibe. “We held our discussions from the viewpoint of whether we can continue to be a top runner or even survive in 2030.”

Carmakers from America to Europe to Asia are already facing rising costs from new technology development and tougher emissions rules, while also struggling to develop cheap electric vehicles that they can sell profitably.