Renault and Nissan announced on Monday that they were in discussions regarding the future of their partnership, including the possibility of the Japanese manufacturer funding a new electric vehicle business started by its French partner.
Moreover, two people with knowledge of the discussions stated that selling a portion of Renault’s stake in Nissan was under consideration. If successful, this would be the greatest reset of the alliance since the arrest of senior boss Carlos Ghosn in 2018.
Prior to a Renault investor presentation in early November, where the French automaker is anticipated to provide an update on its new EV unit, which is code-named “Ampere,” negotiations are anticipated to continue.
Besides, about 43% of Nissan is owned by Renault, and Nissan in turn owns 15% of its long-term partner, in which the French government also has a 15% share.
However, early trading saw shares of Renault increase by as much as 6%, making the company’s stock the highest performer on France’s premier CAC-40 market index. By 11:05 GMT, they were up 3.54%.
In a joint statement, Renault and Nissan stated that they were “engaged in trustful negotiations around many initiatives,” such as a prospective Nissan involvement in the EV project and what they referred to as “structural reforms” in their alliance.
Also, in order to effectively segregate the higher-growth and investment-hungry part of its auto industry, Renault is attempting to convince Nissan to participate in its new electric vehicle venture, which it is establishing alongside a separate combustion engine entity.
According to a person familiar with the negotiations, Nissan is asking Renault to cut its ownership of the Japanese automaker in exchange for investing in the EV project.
As the source familiar with the situation stated for Reuters, Nissan has long taken issue with Renault’s dominance in the alliance and has long demanded that Renault reduce its interest to 15% to match Nissan’s own ownership of Renault.
Given how vehicle development work between the two automakers has developed in recent years, Nissan may be able to reset a structure that many executives at the Japanese company have perceived as being out of balance as a result of the talks.
As reported to a source who spoke to Reuters, Nissan may think about raising money to repurchase the Renault shares.
