Japanese automakers Honda Motor Co. and Nissan Motor Co. are exploring the possibility of a merger, according to reports late Tuesday, in a bid to better compete against foreign electric-vehicle makers like Tesla Inc.

The Japanese carmaking giants confirmed they are in talks for a closer collaboration with each other, but said no decision had been finalized.

Japanese auto giants Honda and Nissan are in preliminary merger talks to help them compete against Tesla and Chinese electric vehicle makers, media reports said Wednesday.The world's auto giants are increasingly prioritising electric and hybrid vehicles,