Daily Management Review

Nissan Looking Out For A Tech Partnership Without Renault As The Alliance Approaches Its Demise


Nissan Looking Out For  A Tech Partnership Without Renault As The Alliance Approaches Its Demise
As the automakers strive to finalize the parameters of a strictly limited alliance, Nissan is developing expansion plans outside of Renault SA in industries like software and electric vehicles (EVs), according to seven people with knowledge of the situation.
Without going into specific contenders, two people engaged in the negotiations said that Japan's third-largest automaker by sales is looking for a partner outside of the auto sector to build software that connects vehicles to cloud-based services. As Nissan works to make automobiles "smarter and more connected," that would address a relative weakness, according to one of the people.
They added that it is also developing a more comprehensive strategy for all-battery and plug-in EVs for the North American and Asian markets that will be exclusive to Nissan.
The information was discovered while the alliance oversight board met this week to consider a rebalancing that will see Nissan obtain reciprocal voting rights and Renault reduce its stake in Nissan from 43% to 15%, mirroring Nissan's stake in Renault.
Nissan will contribute to the French automaker's new Ampere EV division as part of the agreement, which is expected to be finalized by the middle of the year.
Nissan officials had long been incensed by the imbalance, claiming Renault did not cover its fair part of the costs associated with research and development. According to the sources, Nissan's new strategy reflects the automaker's conviction that many of the biggest problems it faces cannot be solved by the 23-year-old alliance.
Additionally, according to two of the sources, it has no plans to contribute its e-Power hybrid technology to the gasoline-focused joint venture that Renault has with China's Zhejiang Geely Holding Group Co Ltd and Saudi Aramco Base Oil Co JSC.
A longer-term plan concentrating on enhanced operating performance, electrification, and software enabling self-driving and other "connected car" capabilities may be announced by year's end as a result of such independent thinking, one of the sources claimed.
"Even if Renault gets something from Nissan, benefits moving in the other direction are hard," a second person with knowledge of Nissan's stance said. "The restrictions from Renault are gone, and we can move freely."
Nissan and Renault stated in a joint statement that they were working toward definitive collaboration agreements that would increase their competitiveness. They stated that they intended to go into depth about already-announced joint projects for Latin America and India.
"The new structure enables faster and more flexible decision making," the pair said in the statement.
They said, without elaborating, investing in Ampere would strengthen Nissan in Europe and "accelerate new business".
Nissan will contribute capital and technological support to the project, but it will keep its operational engagement to a minimum, one of the sources told Reuters. Nissan would seek to acquire it independently if Ampere developed technology that was valuable to Europe, the source said.
The stance represents a hard halt for Carlos Ghosn's ambition, who formerly oversaw both Nissan and Renault and pushed for tighter integration in spite of some Nissan officials' misgivings.
When Ghosn was detained in Tokyo in 2018 on suspicion of financial wrongdoing, he said it was all part of a scheme by Nissan executives to prevent a merger. While awaiting trial, he ran away to Lebanon in late 2019 and has been residing there ever since.
According to those concerned, Nissan has pushed for technology protection in balance talks to minimize any potential drawbacks from an ongoing relationship. According to the sources, Nissan has developed a solid-state lithium-ion battery manufacturing process and an electric hybrid powertrain called the e-Power that it wants to preserve.
The greatest outcome of the alliance talks, according to some executives, would have been a "zero percent, zero percent" equity tie-up, a target they floated to emphasize the need for Nissan to act independently even though they knew it was impossible to achieve.