Designing And Building Electric Cars In China Sees Renault-Nissan Set Up New China JV With Dongfeng Motor

With the aim of designing and building electric cars and joining a list of global automakers aiming to make such vehicles in China, Nissan Motors and its alliance partner Renault are setting up a new joint venture in China with Dongfeng Motor Group.

The automakers are essentially gearing up to meet the anticipated stringent plug-in car quotas in the world’s largest auto market and they are also attempting to tap into a boom for such cleaner “new energy” vehicles in the second largest economy of the world.

On the other hand, with the aim to build electric vehicles in China under a new brand, earlier this month, Ford Motor announced that it was exploring setting up a joint venture with car maker Anhui Zotye Automobile Co.

The Chinese authorities and the government want that electric and plug-in hybrid cars should make up at least a fifth of the country’s auto sales by 2025 and this has driven companies like Tesla, Daimler AG and General Motors who have already announced plans for making electric vehicles in China.

Nissan and Renault said in a statement on Tuesday that with Dongfeng owning 50 percent of the new venture, the joint venture, called eGT New Energy Automotive Co, will be owned 25 percent each by Nissan and Renault each.

A subcompact crossover SUV platform of the Renault-Nissan alliance would form the base for the design of a new electric vehicle by eGT, they said.

“The establishment of the new joint venture with Dongfeng confirms our common commitment to develop competitive electric vehicles for the Chinese market,” Carlos Ghosn, chairman and chief executive officer of the Renault-Nissan alliance, said in the statement.

Issues related to when the vehicles will be launched or any form of details of financial commitments of the joint venture partners, were not available in the statement issued by the companies.

Electric cars are already marketed by both Nissan and Renault. While Renault began selling its Zoe model in 2012, on the other hand since its launch in 2010, Nissan’s Leaf compact hatchback has become the world’s top-selling electric car.

China – an auto market with strong potential for growth where stringent policies favouring cleaner energy cars are being aggressively pursued, is the game changer for global automakers, many of whom until recently have resisted an industry shift to heavily electrified vehicles.

Under China’s latest proposals, 8 percent of any automakers’ total sales need necessarily to be battery electric or plug-in hybrid vehicles by 2019 and the quota will increase to 10 percent in 2019 and 12 percent in 2020 after the mandatory electric vehicle sales quotas are expected to take effect as early as 2018.

(Adapted from CNBC)

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Categories: Economy & Finance, Entrepreneurship, Strategy, Sustainability, Uncategorized

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