Renault’s talks with Geely complicated by Nissan concerns – sources

Renault is undertaking complex restructuring on two fronts. On the one hand, it wants to renew its alliance with Nissan and convince the Japanese carmaker to invest in a new unit for electric cars called Ampere.

At the same time, the company plans to spin off its petrol business code-named “Horse” and sell most of it to Geely.

Investors will be looking for details on the state of play at both talks on Tuesday, with Luca Di Meo, chief executive of Renault Group, providing an update on the French carmaker’s strategy and financial outlook.

Nissan’s concerns over technology rights, which relate to a potential investment in Ampere, indicate that Renault should conduct negotiations and potential settlements of contracts in parallel.

Nissan wants to ensure that its core internal combustion and hybrid technology is protected in any deal Renault makes with Geely, two of the individuals said.

Additionally, the separate issue of a potential technology transfer to a Chinese company should be treated with caution, he said.

Sources are not authorized to speak in the media and are not identified. All three automakers declined to comment.

Renault-Keely Progress

Talks between Renault and Geely have advanced since talks in London last month, one of three people familiar with the matter said, without elaborating. Geely Chief Executive Daniel Li was in London for those talks but has since returned to China, the person said.

Sources said earlier that Geely, which owns a 9.7% stake in Volvo Cars and Daimler AG, may take a significant and controlling stake in the petrol car business.

Talks between Renault and Nissan were underway in Paris last week, with Di Meo and its Nissan boss Makoto Uchida speaking every weekend, Uchida told Reuters last week.

Nissan’s concerns over technology rights are also a reason it has yet to reach a preliminary deal to invest in Ampere. That includes unresolved questions about intellectual property rights for advanced technology such as solid-state batteries, people familiar with the conversations said.

Discussions included the need to ensure that all technology converted to amperage remains in the EV unit, two people said.

Uchida said Nissan is committed to a restructured and “equal partnership” that will strengthen the two’s competitiveness in the transition to electric vehicles.

Renault holds a 43% stake in Nissan, with the Japanese automaker holding a 15% non-voting stake in Renault. People familiar with the talks said the two sides discussed reducing Renault’s stake in Nissan to 15%.

The Renault-Nissan alliance, with Mitsubishi Motors as its junior partner, announced plans to invest $26 billion in January.

That joint investment is only half of what its larger rival, Volkswagen, has pledged.

Uchita said the deal with Renault was important to boost joint investments, as the alliance’s investment levels were still below what he envisioned as “a giant OEM.”

He did not name the OEM manufacturer.

Uchida said Nissan wanted to look at its interests “fairly” in any new partnership Renault entered into with Geely. The transition to electric vehicles is progressing at different speeds in China, the US and Europe, he said.