Internal combustion looms large as Renault, Nissan envision their EV futures

Despite the explosion of EV startups in China, that country’s mainstay automakers are still seen as lagging in cutting-edge combustion technologies. But as players such as Geely, Chery, SAIC or Great Wall make inroads into overseas emerging markets, they will need to up their ICE game.

Japan’s carmakers are often criticized as EV laggards. But because they excel in highly efficient, low-cost, reliable engines, the Japanese — including Nissan — could still scoop up a lot of the world’s lingering business for internal combustion as other manufactures leave the scene.

“Manufacturers that are strong in internal combustion, particularly Japanese manufacturers, may supply those cars to manufacturers that are dedicated to EVs,” Masatoshi Nishimoto, a principal research analyst at S&P Global Mobility, said at a Sept. 29 automotive conference in Tokyo. “The internal combustion business will not grow in volume, but that market will be rebuilt. So this is going to be an opportunity for manufacturers who make internal combustion cars.”

The alliance rework aims to also rebalance the cross-shareholdings between Renault and Nissan, ushering in a new era some are calling Alliance 2.0. Renault could reduce its 43 percent stake in Nissan to 15 percent, while Nissan keeps its current 15 percent stake in Renault.

People involved said no final decision has been reached.

The reshuffling would mark the first major overhaul since Renault saved Nissan from near bankruptcy in 1999 by taking a controlling stake in the then-flailing Japanese blue chip.

Leveling their cross-holdings could alleviate strained ties between the companies, especially in the wake of the ouster of former Alliance Chairman Carlos Ghosn following his arrest in 2018.

An update may also include a more transparent corporate governance accord to replace the opaque Restated Alliance Master Agreement, or RAMA, that has also been a bone of contention between the partners.