Technology sharing is a sticking point as Renault and Nissan have reset, sources say

PARIS/TOKYO, Oct 23 (Reuters) – Technology sharing has emerged as a sticking point between Renault SA (RENA.PA) and Nissan Motor Co Ltd (7201.T) as the two discuss an overhaul of their decades-old partnership negotiate , two people familiar with discussions told Reuters.

The French and Japanese automakers said this month they were in talks over the future of their alliance, including Nissan potentially investing in an electric vehicle business spun off from Renault.

Among those discussions was the consideration of Renault selling part of its roughly 43 percent stake in Nissan, Reuters previously reported, a move that would put the pair on a more equal footing and a seismic shift in a 1999-founded and long-running executive advanced alliance would mark – became the fugitive Carlos Ghosn.

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Intellectual property sharing has become a focus of these talks, the two people said, but declined to be identified because the information was not public.

For the French automaker, a “restart” means the relationship has to be more than just financial, one of the people said.

“What matters is what Nissan brings in intellectual property, engineering and joint projects,” the person said.

With Nissan owning just 15% of Renault — and with no voting rights — the alliance’s French dominance has long been a point of contention. Many executives at the Japanese carmaker see the relationship as unbalanced, especially in development.

Nissan’s concern centers on sharing future technologies, including solid-state batteries for electric vehicles that are currently being developed, the second person said. Sharing old technology is less of a concern, the person said.

Renault is spinning off its electric vehicle business, codenamed “Ampere,” from its old internal combustion engine unit, codenamed “Horse,” as it catches up in an industry shift to electrification led by US rival Tesla Inc (TSLA). O).

Nissan and Renault declined to comment.

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The French government, which owns about 15% of Renault, is keen for the automaker to hold on to its industrial and technological advantages, Finance Minister Bruno Le Maire said.

Following his comments, Japan’s Commerce Ministry asked Nissan about its stance, one of the people said.

The Department of Economy, Trade and Industry did not respond to a request for comment outside of regular business hours.

Renault wants Nissan to invest in its electric vehicle division, while Nissan wants Renault to reduce its stake to 15%, Reuters previously reported.

The pair have yet to reach an agreement on investments as it’s difficult to come up with numbers without a clear valuation of the unit, said three people familiar with the matter.

Bloomberg News quoted a source as saying that Nissan would invest $500 million to $750 million to get about 15% of the unit.

Given its investment needs, Renault is the more ambitious of the two to reach an agreement, a person familiar with negotiations said.

“There is no reason why Nissan absolutely has to participate in the entity,” the person said, citing Nissan’s need to explain the cost-effectiveness of investments to shareholders.

The automakers aim to make an announcement on November 15, although details aren’t finalized and could take weeks, one of the people said.

Alliance junior partner Mitsubishi Motors Corp (7211.T) is likely to invest a few percent in the new Renault unit to maintain its alliance relationship, said another person familiar with the matter.

Mitsubishi said it has not yet launched detailed investment considerations.

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Reporting by Gilles Guillaume in Paris and Maki Shiraki and David Dolan in Tokyo; Editing by Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.

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