Honda and Nissan have acknowledged the possibility of a merger, driving an active trading session in Tokyo for the Japanese auto makers.

The Japanese automakers are in talks to consolidate their resources in an effort to compete against Tesla and Chinese electric vehicle makers.

Honda stock jumped nearly 24% in Tokyo, while shares of Nissan fell 3%, after the longtime Japanese rivals said they were exploring a merger or other collaboration. Shares of France’s Renault, which owns a stake in Nissan,