Renault-Nissan Alliance Plans $25.7 Billion in Electric Vehicle Spending

The alliance hadn’t made a joint announcement since May 2020. Jean-Dominique Senard, Renault SA’s chairman and chairman of the alliance operating board, said he had been asked whether the partnership could survive.

“The main message of this meeting is that the alliance is something that is strong and exists,” Mr. Senard said. “I have to tell you that we have been working and working and working hard, under the radar perhaps.”

He said frictions after the 2018 arrest in Japan of alliance architect Carlos Ghosn were in the past. Heads of the three companies took turns highlighting how they were working together, including a plan by Nissan to replace its Micra hatchback with a new electric model to be built at a Renault factory in Europe.

Still, the three companies, all pioneers in making battery-powered cars, have fallen behind rivals in recent years, and their combined EV investment amount falls short of other leading car makers.

Volkswagen has said it would spend €52 billion, equivalent to $58.2 billion, on electric vehicles and related technologies over the next five years, part of an overall technology drive for which it is budgeting $100 billion. General Motors Co. has said it would spend $35 billion on electric and autonomous vehicles through 2025.

“We have 10 years, even more, of experience in EVs. We don’t start from scratch,” said Clotilde Delbos, Renault’s chief financial officer. “That’s why we don’t feel that we have to spend more billions than what we announced.”

All-EV maker Tesla Inc. said it delivered 936,222 vehicles in 2021, while Renault and Nissan together sold roughly one-fifth that number of EVs.

Another reason for the alliance’s relatively modest spending plan is a more sober outlook by its two Japanese members, Nissan and Mitsubishi Motors, both of which entered the EV market more than a decade ago but struggled for years to make a dent.

Mitsubishi’s chief executive, Takao Kato, said the company aimed to have half its sales come from electric vehicles and hybrids by 2030, a lower figure than many rivals.

“It doesn’t look very ambitious, but there’s a reason,” Mr. Kato said. He said that in contrast to Europe, governments in Mitsubishi’s core market of Southeast Asia have yet to commit fully to battery-electric vehicles.

“Sometimes the government says we will push BEV very strongly, but next year, ‘Ah, sorry, we have revised our direction.’ So, always the strategy is changing,” he said. “For the moment we are very carefully watching the movement of those countries.”

In contrast to a decade ago, when Nissan ramped up production for demand that didn’t come, it is now waiting for customers to start buying electric vehicles, said Ashwani Gupta, Nissan’s second-in-command. He said the car maker was working to bring down costs by focusing on new battery technologies such as solid-state batteries that don’t transport ions through a liquid and can hold a larger charge.

“I think the price of EV, as everybody knows, is quite expensive compared to other cars,” Renault’s Ms. Delbos said.

Two years ago, the Renault-Nissan partnership came close to fracturing over a shareholding relationship tilted in Renault’s favor. The French company owns 43% of Nissan, while Nissan only owns 15% of Renault despite being a much larger company.

The fights have simmered down during the pandemic as both companies focus more on overhauling their troubled businesses. Nissan lost billions of dollars in the last two fiscal years and expects to return to profit in the current fiscal year ending in March. Still, alliance executives say the battle lines remain unchanged.

Mr. Senard said Thursday he didn’t want to talk about the shareholding structure. “In that sort of subject, life is long and we should never be impatient,” he said.

Write to Sean McLain at [email protected]