Nissan Motor Likely To Snub Renault Revamp Over Sharing Technology

Nissan Motor is willing to walk away from a deal with Renault SA to re-balance their alliance amid concerns the French carmaker wants to license hundreds of jointly developed patented technologies to other players, including new Chinese partner Geely.

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.

It includes some 500 joint technologies 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.

Nissan sees risks in Renault Chief Executive Officer Luca de Meo’s plan to merge the French carmaker’s combustion-engine operations with China’s Zheijiang Geely Holding Group, 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.

Makoto Uchida, Nissan’s CEO, 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.” Talks are ongoing, he added. “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.”

“This was always going to be contentious,” says RBC analyst Tom Narayan. “There’s politics involved, there’s shared technology, I understand Nissan’s concerns.”

Talks have been underway for months to reshape the two-decade-old alliance, which gives Renault greater control over its Japanese partner. Renault is scheduled to speak to investors on November 8, when de Meo is expected to give an update on financial targets and the split-up plan.

“Renault, our partner, is going to have this capital markets day and that’s what we have to support,” Uchida said. “And I want that to be successful.”

Ghosn’s Arrest

The shift in ownership would alleviate an imbalance that’s been a source of friction for years. Despite Renault’s outsized stake, it’s the smaller carmaker with 2.7 million of vehicle sales in 2021, compared with 4 million for Nissan.

The 2018 arrest of Carlos Ghosn, who was sent in to run the carmaking alliance when Renault rescued Nissan two decades ago, planted the early seeds for the re-balancing. The former chairman and chief executive officer, who denied the charges, escaped Japan in December 2019 while out on bail and is currently in Lebanon.

Although de Meo has indicated that he’s willing to split up Renault with or without a deal with Nissan, the Japanese company disengaging might make it harder to get the signoff of the French state — which owns 15% of Renault and holds double voting rights — for such a transformative move.

Nissan’s concerns mean it’s unlikely an agreement on the re-balancing will be announced as planned in mid-November, when directors from Renault, Nissan and Mitsubishi Motors Corp., the junior member of the three-way alliance, are scheduled to meet in Tokyo, the people said.

‘Great Technology, Great Assets’

Another 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.”