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Nissan, Renault, Mitsubishi Deepen Alliance in Electric Push

Published Sep 17, 2017


JOHANNESBURG - Nissan Motor Co. and Renault SA, the carmaking partners that have sold the most electric vehicles to date, aren’t planning to give up that No. 1 ranking without a fight.

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The alliance, which also includes Mitsubishi Motors Corp., plans to introduce 12 new purely electric vehicles by 2022 while extending the models’ range and slashing battery costs. And while the group wants more drivers to go electric, some customers won’t actually be driving -- the manufacturers plan a line-up of 40 models by then featuring various levels of automation, including at least one auto that won’t require any human intervention at all.

The six-year plan, called Alliance 2022 and announced Friday by group Chairman Carlos Ghosn in Paris, aims to establish the companies as leaders in the electrification, autonomous and connected-car technologies that are upending the world’s auto markets. Although the shift from internal combustion engines will be costly, Ghosn is betting that sheer size and the sharing of platforms and components will give the partners a leg up in the battle to dominate the future of transport.

An electric car is seen connected to a charging point in Brussels
“We are going to use the scale we have to build more competitive advantages for the future,” Ghosn said in an interview. “The big guys are going to have a big advantage in this situation.”

Renault shares rose 0.8 percent to 79.72 euros as of 11:16 a.m. in Paris. The stock is trading at the highest price since July 27.

Size Matters

While the alliance is the current world leader in cumulative electric-car sales, paced by the Leaf from Yokohama, Japan-based Nissan, the group needs to fend off increasing competition from long-time rival Volkswagen AG as well as newcomers like Tesla Inc., which this year introduced its mass-market Model 3 to great fanfare. With car-hungry China the latest country to announce intentions to phase out fossil-fuel powered vehicles, following the lead of the U.K. and France, there’s plenty at stake for automakers jostling to lead the zero-emissions segment.

FILE - In this April 20, 2017 file photo, visitors walk past the Renault stand during the Auto Shanghai 2017 show at the National Exhibition and Convention Center in Shanghai, China. Automakers Renault and Nissan said Tuesday, Aug. 29, 2017, that they plan to develop electric cars with a Chinese state-owned partner. (AP Photo/Ng Han Guan, File)
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The Renault-Nissan-Mitsubishi alliance delivered a combined 5.27 million vehicles in the first half of this year, outselling mass-market leaders Toyota Motor Corp. and Volkswagen. The group is predicting it will end the year as the industry’s top seller for the first time, with expected sales of 10.5 million units in 2017. That number will grow to at least 14 million in 2022, Ghosn said.

“When you have the advantage of scale, you don’t have to take shortcuts,” Ghosn said. “You can afford to develop all the technologies that are necessary for the car of the future.” While the group is open to new partners as “the logic of the alliance is to have other members join in,” it’s not seeking to expand with additional carmakers and would only bring another on board if an opportunity arises, he said at a Paris press briefing.

By 2022, some of the group’s electric cars will be able to travel more than 600 kilometers (372 miles) on a single battery charge, according to European testing methods, or more than 50 percent farther than the range of the 2018 Leaf compact that Nissan unveiled this month.

By the end of the years-long plan, 15 minutes of charging time will allow the EVs to travel 230 kilometers, compared to 90 kilometers last year. The partners plan to reduce electric-car battery costs by 30 percent from 2016 levels and further savings by extending the use of shared platforms and powertrains.

More than 9 million vehicles will be made on four shared global platforms in 2022, compared with the 2 million cars produced on two shared platforms today. Some 70 percent of the group’s engines and transmissions will shared globally by then, up from about a third currently. This will help boost the alliance’s annual cost-saving target to more than 10 billion euros ($11.9 billion) in 2022 from 5 billion euros last year, Ghosn said.

The alliance is also testing autonomous vehicles and plans to become an operator of robo-vehicle ride-hailing services -- a potential business other major automakers are mulling for growth. In the medium term, mobility services are unlikely to represent a big portion of revenue versus the partners’ traditional businesses of making vehicles and components, Ghosn said.

Journalists and guests look at new Nissan LEAF electric vehicle after the world premiere in Chiba, near Tokyo Wednesday, Sept. 6, 2017. Nissan's new Leaf electric car goes father on a charge and comes with autonomous drive technology and single-pedal driving. But whether it can catch on with anyone but the most zealously green-minded remains to be seen. (AP Photo/Eugene Hoshiko)
Revenue Forecast

Operating with a new joint logo, the companies project global revenue of $240 billion in 2022, up from $180 billion last year. In October, Nissan, Renault and Mitsubishi will each present their own plans based on what they hope to achieve for each vehicle in each region. Renault, which was Europe’s second-biggest carmaker last year, has its headquarters in the Paris suburb of Boulogne-Billancourt, while Mitsubishi is based in Tokyo.

“We think growth for the industry will be mainly coming from China, India and Southeast Asia, and we’re ready for that,” Ghosn said.

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As an illustration of the enormity of the task ahead, VW announced sweeping plans during this week’s Frankfurt motor show to build electric versions of all 300 models in the 12-brand group’s lineup. The German auto giant is vowing to spend 20 billion euros by 2030 to roll out the cars and earmarked another 50 billion euros to buy the batteries needed to power the vehicles.

Ghosn, 63, declined to stay whether he will stay as chairman of the alliance for the plan’s entire six-year period. He stepped down as Nissan’s chief executive officer this year but continues to hold that title at Renault.  “Six years is a very long period,” he said in the interview. “We’re going to take it step by step.”


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