Japanese automaker Nissan (NSANY) finds itself at a crossroads. Nissan was poised to participate in a megamerger with rival Honda (HMC), and it was a huge development when the talks were revealed late last year.

Nissan’s decision to withdraw from merger discussions with Honda marks the latest setback for the struggling automaker as it faces declining sales, financial pressures, and an increasingly competitive electric vehicle (EV) market.

The landmark EV merger, which would create the world’s third-largest automaker, may not happen after all. Honda and Nissan’s