Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

Japan’s second- and third-largest automakers hope the $50 billion deal would help them catch up with Tesla and China’s BYD in electric vehicles and advanced software.

Japanese automakers Honda and Nissan have announced plans to work toward a merger that would form the world's third-largest automaker by sales, as the industry undergoes dramatic changes in its transition away from fossil fuels.