Nissan Motor likely to snub Renault overhaul over sharing tech

Nissan Motor is poised to pull away from a deal with Renault SA to rebalance its alliance amid concerns the French automaker plans to license hundreds of jointly developed patented technologies to other players, including new Chinese partner Geely.

While both sides appeared close to a final agreement two weeks ago, Nissan’s board and management recently expressed concern over Renault’s intellectual property plans.

It encompasses around 500 shared technologies, including expertise in areas such as autonomous driving, hybrid powertrains, solid state batteries, security systems, battery management software and other know-how critical to the development of self-driving, electrified vehicles.

Nissan sees risks in Renault CEO Luca de Meo’s plan to merge the French automaker’s internal combustion engine operations with China’s Zheijiang Geely Holding Group and is seeking assurances that key technologies will be protected in any deal with the Hangzhou-based automaker, owner of become car brands Volvo and Lotus.

Nissan CEO Makoto Uchida said he was “surprised” that there is speculation that the IP discussion could derail the broader deal, but recognized technology is a “very important core value 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 has to be protected,” Uchida said in an interview with Bloomberg News on Friday. “That’s my duty as CEO.”

“It’s always been controversial,” says RBC analyst Tom Narayan. “There’s politics involved, there’s shared technology, I understand Nissan’s concerns.”

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

“Renault, our partner, will host this capital markets day and we have to support that,” said Uchida. “And I want that to happen.”


Ghosn’s arrest

The change in ownership would eliminate an imbalance that has been causing friction for years. Despite Renault’s outsized stake, it’s the smaller automaker with 2.7 million vehicle sales in 2021, compared to 4 million at Nissan.

The 2018 arrest of Carlos Ghosn, who was sent to head the auto alliance when Renault bailed out Nissan two decades ago, laid the groundwork for the realignment. The former chairman and chief executive officer, who denied the allegations, fled Japan on bail in December 2019 and is currently in Lebanon.

Although de Meo has indicated he is ready to break up Renault with or without a deal with Nissan, the Japanese company’s withdrawal could make it harder to get the approval of the French state – which owns 15% of Renault and has dual voting rights – – for such a transformative step.

Nissan’s concerns make it unlikely that an agreement on the realignment 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 due to meet in Tokyo, said the people.


“Great Technology, Great Assets”

Another sticking point is the rating of amps. The lack of a specific number backed by data makes it difficult for Nissan to determine how much to invest for a stake in the new entity, which Renault plans to publicly list, one of the people said.

Uchida declined to comment on the timing of an announcement or Ampere’s rating.

According to Renault’s plans, Ampere would be based in France and employ about 10,000 people by 2023. The unit with Geely, codenamed Horse, would also have about 10,000 personnel.

“We discussed how to strengthen the alliance of each and every company under the difficult circumstances we are facing,” said Uchida. “That’s how it started. We also wanted to talk about how Allianz could maximize the great technology and assets of both companies.”

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