Wednesday, July 24, 2024

Nissan ready for potential investment in Renault electric vehicle business

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Renault and Nissan are in discussions to re-form an automotive alliance. Those discussions included Nissan considering investing in the development of Renault electric vehicles.

Negotiations between the French and Japanese car manufacturers will continue ahead of the Renault investor presentation in early November. Where the French automaker is expected to provide an update on its new EV unit, codenamed “Ampere”.

These discussions also pushed Renault shares up as much as 6% in early trading. This makes the stock the best performer on the French CAC-40 equity index (.FCHI).

Renault and Nissan said in a joint statement that they were engaged in discussions around several initiatives, including Nissan’s potential investment in the EV venture and what they called structural improvements in their alliance.

The discussions took place when Renault CEO Luca De Meo, who was in Japan over the weekend, and Nissan CEO Makoto Uchida were at the center of talks about reshaping its terms, a person familiar with the talks said.

A group of Nissan executives, including Chief Operating Officer Ashwani Gupta, have also been involved in developing discussions in recent months. This was reported by Reuters, Tuesday (11/10/2022).

Renault wants to win over Nissan as an investor in its new EV venture, set up alongside a separate combustion engine unit, essentially dividing up the higher-growing, investment-hungry part of its car business.

In return for investing in the EV venture, Nissan is seeking Renault to reduce its stake in the Japanese automaker.

The dominance of the French alliance has long been a point of contention for Nissan, which wants Renault to cut its stake to 15% to level with its own stake in Renault.

For Nissan, the talks could represent an opportunity to reorganize a structure that many executives at the Japanese company consider unbalanced, given the way vehicle development work between the two automakers has evolved in recent years.

Nissan may consider raising funds to buy back shares held by Renault, one person told Reuters.

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