With electrification, Nissan’s Gupta sees new spark for Renault merger

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Nissan Motor Co (7201.T) will standardize and share components for electric vehicles with alliance partner Renault SA (RENA.PA), the Japanese automaker’s chief operating officer (COO) said, describing the electrification as the new hub of the partnership.

The Franco-Japanese alliance, which also includes junior member Mitsubishi Motors Corp (7211.T), has come under strain following the arrest and ousting of former president Carlos Ghosn. Since then, the coronavirus pandemic has given impetus to rebuild the collaboration, and companies have sought to standardize parts and platforms to reduce costs.

Nissan has already shared common platforms, powertrains and components with Renault and Mitsubishi, but these efforts have “reached the maximum that we should be doing,” Ashwani Gupta, Nissan chief operating officer, told Reuters, in an interview on Friday.

“This is why we are shifting the speed of additional synergies by using electrification as the main pillar,” he said.

The focus will be on sharing batteries, electric powertrains and electronic architecture, he said, adding that adopting a uniform standard across the alliance “would help significantly.” economies of scale.

Gupta said electrification would not pose a supply issue due to Nissan’s global component supply. He said he had a supply of batteries in China, Japan, Europe and the United States.

Together, the alliance sold more than 7.8 million cars last year, down about 23% from 2019 as companies were hit by the pandemic.

The willingness to share more work on electric vehicles (EVs) illustrates the scale of the challenge facing automakers around the world as the industry is transformed by rapidly evolving technology.

Ford (FN) has entered into a strategic alliance with Volkswagen AG (VOWG_p.DE), under which Ford will use its German partner’s MEB electric vehicle platform to build certain models.

Toyota Motor Corp (7203.T) has expanded its ties with companies such as Subaru Corp (7270.T) and Chinese battery and auto maker BYD (002594.SZ) to jointly develop electric vehicles, while Honda Motor Co (7267.T) and General Motors (GM.N) will introduce two jointly developed full-size EV models using GM’s Ultium batteries in 2024.

BATTERY HURDLES

Nissan, one of the first automakers in the world to fully embrace electric vehicles with its Leaf model, will share the platform of its upcoming fully electric SUV Ariya with Renault.

Batteries are one of the most expensive components in electric vehicles, with raw materials accounting for most of the cost. Yet battery development has been one of the alliance’s weak points for more than 20 years, with Nissan and Renault sourcing separately. Read more

Renault chief executive Luca de Meo said this month the two companies were in talks to collaborate more using the same battery technology, and Gupta said on Friday it had agreed on common battery specifications.

Gupta also said that while keeping each brand’s distinctiveness was important in the alliance, automakers would share “to eliminate duplication of resources.”

Nissan, the third-largest Japanese automaker in terms of sales, has said it will electrify all new models in key markets by the early 2030s. It expects annual sales of more than one million electrified vehicles. ‘by the end of fiscal year 2023.

Our Standards: Thomson Reuters Trust Principles.



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