Nissan CEO says Renault talks focused on leveraging EV strengths

Europe

TOKYO — Nissan’s talks with alliance partner Renault are focused on optimizing their investment in electric vehicles and strengthening their competitiveness as equal partners, Makoto Uchida, the Japanese automaker’s CEO, said.

Negotiations with Renault, also Nissan’s top shareholder, have less than two weeks remaining to meet a Nov. 15 target the automakers had set to reach a deal, according to people with knowledge of the talks.

Uchida declined to comment on whether an agreement could be reached this month. But he said he was talking with Renault CEO Luca de Meo every weekend and the talks would be “ongoing for the future.”

The automakers said last month they were in discussions about the future of an alliance founded in 1999 when Renault took a stake in Nissan and helped drive a turnaround for the Japanese company under former executive-turned-fugitive Carlos Ghosn.

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

Uchida said on Friday that the talks are aimed at improving the automakers’ ability to compete at a time of economic uncertainty and as the industry pushes toward what he described as its biggest transformation in a century with the shift to EVs.

“The discussion we are having is about how to make our competitiveness even stronger,” Uchida said. “That is No. 1.”

People with knowledge of the talks have said the two sides have also been discussing a reduction in Renault’s 43 percent stake in Nissan, potentially to 15 percent 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 that would speed up the collaboration even more.”

He did not comment on potential stake levels.

Renault is splitting off its electric vehicle business, code-named Ampere, from its legacy internal combustion engine business, code-named Horse, as it plays catch-up in the shift to electric vehicles led by U.S. rival Tesla.

On a separate track from its discussions with Nissan, Renault has also been talking to Geely Automobile about the Chinese automaker taking a stake in its internal combustion-engine unit, people familiar with those talks have said. That unit includes Renault production sites in Spain, Portugal, Turkey, Romania and Latin America.

The talks with Geely, however, have caused a such riff that Nissan is willing to walk away from the deal over concerns the French automaker wants to license hundreds of jointly developed patented technologies to Geely and other players, people familiar with the negotiations said.

While both sides appeared near a final agreement two weeks ago, Nissan’s board and management have recently expressed concern over Renault’s plans for the intellectual property, the people said, asking not to be identified as the information isn’t public.

It includes some 500 joint technologies, one of the people said, among them expertise in areas such as autonomous driving, hybrid powertrains, solid-state batteries, safety systems, battery-management software and other know-how critical for developing self-driving, electrified vehicles.

Uchida said Nissan understood the transformation Renault was undertaking with the carving out of its gasoline-car business and that “fair treatment” for Nissan as part of a new partnership was an area of discussion. He did not mention Geely by name.

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

“Transparency is very important,” he added.

Nissan sees risks in de Meo’s plan to merge the French carmaker’s combustion-engine operations with Geely, the people said, and are 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” there is speculation the IP discussion may derail the wider deal, but acknowledged technology was a “very important core asset for the alliance.”

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

Geely didn’t immediately respond to questions from Bloomberg. A representative for Renault declined to comment.

nother sticking point is the valuation of Ampere. The lack of a specific figure backed by data is making 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 on the valuation of Ampere.

Under Renault’s plans, Ampere would be based in France and employ about 10,000 people by 2023. The entity with Geely, code-named Horse, would also have a staff of about 10,000.

“We have been discussing how we can make the alliance of each individual company stronger under the difficult circumstances we are facing,” Uchida said. “That’s how it started. We also wanted to speak about how the alliance could maximize the great technology and 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 need to anticipate many scenarios, and that’s what we are doing,” 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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