• Bloomberg


The Renault-Nissan alliance is expanding its push into China, teaming up with Dongfeng Motor Group Co. on its first locally designed electric vehicle as emissions rules tighten in the world’s largest car market.

Renault SA, Nissan Motor Co. and Dongfeng established a joint venture to develop a battery-powered model based on a small sport utility vehicle platform developed by the French-Japanese alliance, the companies said Tuesday. The vehicle is due to hit showrooms in 2019.

Automakers are accelerating electric-vehicle investment in China to meet stricter environmental rules set to take effect in major markets. Starting next year, carmakers that fail to meet fleet-based emissions and fuel-economy limits could face fines under China’s new cap-and-trade framework.

Last week, Ford Motor Co. said it will explore setting up a venture with Anhui Zotye Automobile Co. to produce EVs. In May, Volkswagen AG received approval for partnership with Anhui Jianghuai Automobile Group to produce electric cars. Daimler AG and BMW also have electric car brands under their partnerships with BYD Co. and Brilliance China Automotive Holdings Ltd., respectively.

Renault and Nissan each hold 25 percent of eGT New Energy Automotive Co., with Dongfeng Motor owning the rest, the companies said. A Renault-Nissan spokeswoman declined to provide details on investment for the venture, which started operations in July. Dongfeng is a long-time partner of the French and Japanese companies and currently makes Kadjar SUVs with Renault and Teana sedans with Nissan in China. Dongfeng will produce the electric vehicle at a factory in Shiyan, Hubei province.

While Nissan’s Leaf is assembled in mainland China and sold as the Venucia e30 since 2014, the new EV — which the company has said will cost about $8,000 — will be the first model the alliance designed from scratch in China. The Japanese carmaker has struggled to sell the Leaf mainly because its price is too high compared with most locally made EVs. As part of its repositioning, Nissan this month sold a subsidiary that produces batteries for the Leaf to Chinese private equity firm GSR Capital for about $1 billion.

Dongfeng has actively partnered with international carmakers. The Wuhan, Hubei-based manufacturer acquired a 14 percent stake in PSA Group in 2014 and makes SUVs and sedans for the French company’s Citroen nameplate. Dongfeng also partners with Honda Motor Co. and Kia Motors Corp.

The three-way alliance of Renault, Nissan and Mitsubishi Motors is the world’s leading maker of mass-market electric cars. Cumulative sales of vehicles such as the Leaf, Renault’s Zoe and Mitsubishi’s i-Miev topped 481,000 units as of the end of June.

China scooped the top six spots in a global index of electric-vehicle manufacturers in a sign that its strategy to develop the sector may be making headway. BYD, Jiangling Motors Corp. and BAIC Motor Corp. led the group which beat out European and Japanese rivals. U.S. carmakers did not make the top ten.

Sales of battery-powered vehicles rose 34 percent to 204,000 units in the first seven months of 2017, according to the China Association of Automobile Manufacturers.

The Chinese government plans to increase the annual output of new-energy vehicles — its term for battery-powered cars, plug-in hybrids and fuel cell vehicles — to 2 million units by 2020. Such automobiles are expected to make up more than one fifth of the total sales by 2025, according to the latest auto industry plan released by the Ministry of Industry and Information Technology.

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