Electric mobility: renault, nissan and mitsubishi join forces and plan billion-euro investments

 electric mobility: renault, nissan and mitsubishi join forces and plan billion-euro investments

Auto industry renault, nissan and mitsubishi join forces on electric car plans

Gregor Waschinski has been Handelsblatt correspondent in Berlin since May 2018, focusing on healthcare policy and pensions

Martin Kolling, Handelsblatt editor and correspondent in Tokyo. Source: private

The automaker is throwing its platforms together with those of Renault and Nissan. Source: imago images/AFLO

The automaker is merging its platforms with those of renault and nissan.

Paris, tokyo the automaker alliance of renault, nissan and mitsubishi plans to work more closely together on electric vehicles, investing some 23 billion euros over the next five years. 35 new battery-powered cars are to be developed by 2030 on the basis of five joint platforms, the companies announced on thursday.

The virtually assembled top management of the three manufacturers strove for harmony when presenting their plans – and probably wanted to send a signal in doing so. For the Japanese-French auto alliance has recently appeared rather disjointed. "three years ago, the alliance experienced a crisis unprecedented in its history because of a lack of mutual trust," renault board chairman jean-dominique senard said. "this period is now a thing of the past."

The investment volume of 23 billion euros corresponds to the sums that the three companies had already announced individually as part of their respective electric strategies. By combining their activities, they hope to get more out of money. By 2026, renault, nissan and mitsubishi want to build 80 percent of their vehicles on the basis of common platforms – the current figure is 60 percent.

With a focus on electric mobility, the French-Japanese alliance also gives itself a new vision. The strategic cooperation between renault and nissan began in the late 1990s, when the french saved the japanese company from bankruptcy. Both manufacturers were headed by carlos ghosn, who wanted to make the alliance the world’s largest carmaker by sales.

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Mitsubishi joined in 2016. One year later, ghosn achieved his goal and overtook volkswagen as new number one.

Conflict over power in the alliance

In the background, however, the conflict over dominance in the alliance always smoldered between the Japanese and the French. When ghosn came under Japanese judicial scrutiny in late 2018 over allegations of tax evasion and embezzlement, the alliance crumbled. The father of the alliance had to resign at the beginning of 2019 and later departed from house arrest in tokyo for lebanon.

Renault-Nissan-Mitsubishi wants to work more closely together again - with a focus on electric mobility. Source: Reuters

Renault-nissan-mitsubishi wants to work more closely together again – with a focus on electromobility.

Renault in particular ran into difficulties afterwards and had to be rescued in 2020 with a billion-euro loan from the government in paris. Luca de meo then initiated a tough turnaround in his now 18 months as CEO of the French company. The first phase will run until the end of 2022: "resurrection". De meo spoke of major progress in mid-January, saying that the target of reducing fixed costs by two billion euros had already been achieved last fall.

Nissan, on the other hand, currently seems to be the stronger partner. Group CEO makoto uchida announced in november a net profit for the 2021 financial year, which runs until march of this year – after two years of billion-dollar losses. Japanese media have long wondered whether the balance of power in the alliance still reflects the real significance of the groups for the alliance: with a 43.4 percent stake in nissan, renault is the dominant partner, while nissan holds only 15 percent of renault’s shares – without voting rights. The question about the shareholding ratios also came up at the virtual press meeting on thursday, but remained unanswered.

Japanese media are particularly critical of the French state’s 15.01 percent stake, which gives it a say in renault’s business decisions and potentially politicizes them.

Japanese auto expert takaki nakanishi therefore takes a critical view of the relationship, asking: "is the three-way alliance between nissan, renault and mitsubishi motors really working??" relations between the japanese and the french remain "a little frosty," to say the least". However, nakanishi believes the new plans make sense: the bundling of activities in batteries and electric cars could mean competitive advantages for the three manufacturers.

The model was one of the first electric cars on the mass market.

Nissan and renault aim to build on past successes with billion-dollar investments. In 2010, the japanese company launched the Leaf compact car, the first mass-produced model designed from the ground up as an electric car, on the global market. Renault was the first european manufacturer to launch a mass-produced small car with a lithium battery, the zoe, in 2012. But competitors like tesla and volkswagen soon took the lead in the e-car market.

Renault makes the software, nissan the batteries

The nissan leaf and the renault zoe were developed independently at the time. In the future, renault and nissan will divide the work: the french will develop the software components of the models, nissan will take care of autonomous driving and battery technology.

the japanese promise not only to replace the expensive cobalt in lithium-ion batteries and thus reduce battery costs by 65 percent to 75 dollars per kilowatt hour (kwh) by 2028, but also to reduce the cost of the battery by 2050. Nissan is also working on solid state batteries. Not only do they store significantly more energy than lithium-ion batteries, they also charge faster. Nissan plans to mass-produce them starting in 2028.

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