By Maki Shiraki

TOKYO, March 15 (Reuters) - Nissan Motor ( NSANF ) is

considering seeking a business partnership with Honda Motor ( HMC )

on key components for electric vehicles to cut

production costs, three people familiar with the matter at

Nissan ( NSANF ) said.

The potential partnership with domestic rival Honda ( HMC ) could

help Nissan ( NSANF ) gain economies of scale in producing EVs, which is

crucial for Japanese automakers as they face heavy competition

from China's BYD, Tesla and other electric

vehicle makers.

The sources, who declined to be identified as the matter

is still private, said Nissan ( NSANF ) and Honda ( HMC ) are yet to formally

start discussions, with the scope of the partnership undecided.

A Nissan ( NSANF ) spokesperson declined to comment. A Honda ( HMC )

spokesperson said there was nothing the company could say.

The heads of the two automakers are due to hold a joint

press conference in Tokyo at 3:30 p.m. (0630 GMT).

Another source said the idea of collaboration emerged

between the chief executives of the companies.

Nissan ( NSANF ) is considering partnering with Honda ( HMC ) on key EV parts,

as well "kei car" - boxy vehicles that are smaller and less

powerful than regular cars, primarily made for the domestic

market.

The partnership could extend to overseas businesses, but

that would affect Honda's ( HMC ) existing collaboration with General

Motors ( GM ), according to two of the sources.

Nissan's ( NSANF ) pursuit of a partnership was first reported by TV

Tokyo. The Nikkei newspaper has reported specific measures could

include the introduction of a common powertrain, joint

procurement and development of a common platform.

A source at Honda ( HMC ) said a potential partnership with Nissan ( NSANF )

is one of many possibilities the company is considering, but

there are many agenda that need to be sorted out for it to

proceed with a new tie-up.

Honda ( HMC ) is aiming to increase its ratio of electric vehicles

and fuel cell vehicles to 100% of all sales by 2040.

Nissan ( NSANF ) already cooperates with Renault on EVs, mainly in

Europe. The next Nissan ( NSANF ) electric Micra will share the same

architecture as the new Renault Five and be built in the same

plant in northern France.

Nissan ( NSANF ) has also committed to invest up to 600 million euros

($653 million) in Renault's new electric vehicle entity Ampere.

But the two firms last year reduced the scope of a

years-long alliance to allow for a more agile partnership, and

Renault has since signed agreements with new partners such as

China's Geely.

(Reporting by Maki Shiraki; Writing by Makiko Yamazaki;

Additional reporting by Kantaro Komiya and Satoshi Sugiyama;

Editing by Himani Sarkar, Michael Perry and Lincoln Feast.)