Tokyo | Merger discussions between Nissan and Honda, Japan’s second- and third-largest carmakers, mark a pivotal moment in the industry’s painful transition to a future when electric vehicles rule the road.

The potential tie-up between two proud Japanese manufacturers, who have fiercely competed for over half a century, reveals the stark reality facing traditional automakers: consolidate or risk being left behind in an EV revolution led by Tesla and aggressive Chinese upstarts.