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Renault may reduce Nissan stake, split into EV and ICE businesses

Renault is considering a range of options to fund its EV push, including selling down its stake in Nissan and an IPO for its EV business.

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Derek Fung
Derek Fung
Journalist
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Renault is investigating all sorts of ways of funding its upcoming wave of EVs, including selling off part of its stake in Nissan, and listing the EV side of its business on the stock market.

Last week sources told Bloomberg Renault was considering selling part of its Nissan shareholding. This would not only raise billions in euros for electric vehicle development, but also help to soothe relationship with Nissan.

At the end of last week, Thierry Piéton, Renault’s chief financial officer, told Reuters all options are on the table regarding listing or separating its EV business.

Piéton also said Nissan is “in the loop” on the French automaker’s internal discussions.

Listing Renault’s EV operations on the stock market could free up the legacy business to partner up with another automaker, with Geely cited as a possible player.

Geely and Renault recently struck a deal which would see the French automaker use the Chinese firm’s platforms in China and South Korea.

In China, Geely will produce vehicles for Renault at its factories, while in South Korea the Renault Samsung brand is set to base its future models on vehicles from Geely’s Lynk & Co marque.

It should be noted, earlier this year there were rumours about Ford listing its EV business on the stock market. In the end Ford decided to create separate divisions for electric and ICE (internal combustion engine) vehicles.

If Renault does decide to sell some of its stake in Nissan, it will follow in the footsteps of the Volkswagen Group, which recently announced plans to partially float Porsche on the market to raise extra funds for its EV development programs.

In January the Renault-Nissan-Mitsubishi Alliance announced plans to dramatically increase its electric vehicle spend to €23 billion ($33 billion) with around 35 cars EVs due by 2030 on five common platforms.

The sell down could also improve relations between the two firms.

Currently Renault owns around 1.8 billion Nissan shares, or roughly 43 per cent of the Japanese automaker. Not only does Renault have extensive voting rights, but as a controlling shareholder under Japanese law, it can nominate board members and name its CEO.

As part of the Renault-Nissan-Mitsubishi Alliance, Nissan owns a reciprocal 15 per cent in Renault, but its shares carry no voting rights.

This has led to many tensions between the two automakers, with many in Nissan disturbed by the fact it is controlled by a smaller, less profitable company.

Some observers believe disquiet about the nature of the relationship, and plans for a merger were behind the arrest of former CEO Carlos Ghosn and close associate Greg Kelly in 2018.

MORE: Which brand owns which, and how did we get here?

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Derek Fung
Derek Fung

Derek Fung would love to tell you about his multiple degrees, but he's too busy writing up some news right now. In his spare time Derek loves chasing automotive rabbits down the hole. Based in New York, New York, Derek loves to travel and is very much a window not an aisle person.

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