Sony and Honda Motor are likely to pair up to develop and sell electric vehicles, Reuters reported on Friday.
Both companies are also open to bringing in other partners.
The companies said in a statement they would form a joint venture this year and aim to begin selling the first model in 2025.
Honda will be responsible for manufacturing the first model, while Sony will develop the mobility service platform, they said.
"In the joint venture, we would like to lead the mobility revolution by combining our technology and experience with Honda's long experience in mobile development and vehicle body manufacturing technologies," the report quoted Sony CEO Kenichiro Yoshida as saying.
In January this year, Sony unveiled a prototype of an electric car at the CES 2022. Alongside, it also promised to open a dedicated mobility unit by spring this year, which will be named "Sony Mobility Inc."
Meanwhile, Honda has said it will continue to develop its own electric vehicle strategy separate from the joint venture.