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.

Japanese automakers Nissan Motor Corp. and Honda Motor Co. confirmed Wednesday that they are discussing closer collaboration but denied reports they have decided on a merger.

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