Japanese automakers Nissan and Honda have announced plans for a merger that would catapult them to a top position in an industry that's in flux as it transitions away from its reliance on fossil fuels.

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.

Moody's gave a positive review of the potential merger of Honda and Nissan, but former Nissan CEO Carlos Ghosn warned his old employer would face "carnage" if the combination went through.