The Detroit Three are facing an auto industry increasingly affected by the rise of China as demonstrated by the planned merger of Honda and Nissan.

Japanese automakers Nissan and Honda have announced plans for a merger that would catapult them to a top position in an industry that's in flux as it transitions away from its reliance on fossil fuels.

A potential merger between Honda Motor and Nissan grabbed investor attention as Honda's stocks rose on Monday. Japanese automotive titans Honda and Nissan are working on a potential merger that would create the world's third-largest automaker as the global industry races to adapt to the electric vehicle (EV) revolution.