A possible tie-up with Honda could help Nissan solve a big problem, car dealers said: It doesn't have any hybrids. A merger could fix that.

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 and Honda are reportedly considering a merger to make themselves more competitive in the electric vehicle market, particularly in the face of Tesla and Chinese manufacturers’ success.