Nissan focuses on electric vehicles in talks with Renault

TOKYO — Nissan’s talks with alliance partner Renault focus on optimizing their investments in electric vehicles and boosting their competitiveness as equal partners, said Makoto Uchida, CEO of the Japanese automaker.

Negotiations with Renault, also Nissan’s biggest shareholder, have less than two weeks to reach the Nov. 15 target the automakers had set for reaching an agreement, according to people familiar with the talks.

Uchida declined to say whether a deal could be reached this month. But he said he spoke with Renault CEO Luca de Meo every weekend and that discussions would be “ongoing for the future”.

The automakers said last month they were in discussions over the future of an alliance founded in 1999 when Renault took a stake in Nissan and helped turn around the Japanese company under former leader-turned-fugitive Carlos Ghosn .

Nissan is also considering investing in Renault’s planned EV unit, the companies said.

Uchida said on Friday the talks were aimed at improving automakers’ ability to compete in times of economic uncertainty and as the industry heads for what he described as its biggest transformation in a century with the shift to electric vehicles.

“The discussion we are having is about how to make our competitiveness even stronger,” Uchida said. “It’s number 1.”

People familiar with the talks said the two sides also discussed reducing Renault’s 43% stake in Nissan, potentially to 15%, and the terms under which that could happen.

“We want it to be an equal partnership,” Uchida said, adding that an “equal partnership would make sense and it would speed up the collaboration even more.”

He did not comment on potential turnout levels.

Renault is separating its electric vehicle business, codenamed Ampere, from its former internal combustion engine business, codenamed Horse, as it catches up with the shift to electric vehicles led by U.S. rival Tesla.

On a separate track from its talks with Nissan, Renault also spoke to Geely Automobile about the Chinese automaker’s stake in its internal combustion engine unit, people familiar with the talks said. This unit includes Renault production sites in Spain, Portugal, Turkey, Romania and Latin America.

Talks with Geely, however, have caused such a riff that Nissan is ready to pull out of the deal, fearing the French automaker wants to license hundreds of patented technologies jointly developed with Geely and other players. people familiar with the negotiations said.

As the two sides seemed close to a final deal two weeks ago, Nissan’s board and management recently expressed concern over Renault’s intellectual property plans, the sources said, asking not to be identified because the information is not public.

It includes some 500 common technologies, one of the people said, including expertise in areas such as autonomous driving, hybrid powertrains, solid-state batteries, security systems, battery and other skills essential to the development of self-driving, electrified vehicles.

Uchida said Nissan understood the transformation Renault was undertaking with the spin-off of its gasoline car business and that “fair treatment” for Nissan under a new partnership was a topic of discussion. He didn’t mention Geely by name.

“If they have their new partner, A or B or C, what does that mean? We discuss it openly,” he said.

“Transparency is very important,” he added.

Nissan sees risks in de Meo’s plan to merge the French automaker’s combustion engine business with Geely, the sources said, and is seeking assurances that key technologies will be protected under any deal with the Hangzhou-based automaker, owner of Volvo and Lotus car brands. .

Uchida said he was “surprised” that there was speculation that the intellectual property discussion could derail the wider deal, but acknowledged that technology was a “very important critical asset for the alliance”. .

“Of course there are areas where we have to say ‘this is our core technology’ and that has to be protected,” Uchida said in an interview with Bloomberg News on Friday. “It’s my duty as CEO.”

Geely did not immediately respond to questions from Bloomberg. A Renault representative declined to comment.

Another sticking point is Ampere’s valuation. The lack of a precise figure backed by data makes it difficult for Nissan to determine how much to invest for a stake in the new entity, which Renault wants to list publicly, one of the people said.

Uchida declined to comment on the timing of any announcement or Ampere’s valuation.

According to Renault’s plans, Ampère would be based in France and employ around 10,000 people by 2023. The entity with Geely, codenamed Horse, would also have a workforce of around 10,000.

“We discussed how we can strengthen each company’s alliance in the difficult circumstances we face,” Uchida said. “That’s how it all started. We also wanted to talk about how the alliance could maximize the great technology and the great assets that both companies have.”

Uchida said Nissan was making contingency plans for the prospect of a global recession. “For us to be sustainable in the market, we have to anticipate many scenarios, and that’s what we do,” he said.

He cited the depreciation of the yen to its lowest level in decades as another concern for Nissan.

— Reuters and Bloomberg contributed

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