Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

Japan’s second- and third-largest automakers hope the $50 billion deal would help them catch up with Tesla and China’s BYD in electric vehicles and advanced software.

Japanese automakers Honda Motor Co. and Nissan Motor Corp. announced Monday their intention to merge by 2026 and create the world’s third-largest car-making operation by sales.