Renault Will Only Sell Its ICE Business to Geely If It Sorts Things Out With Nissan

Of all the automotive industry’s stories, there is probably not one more complicated than that of Renault’s alliance with Nissan. After Carlos Ghosn spared the Japanese carmaker from bankruptcy, he started implementing synergies that saved billions for both companies. However, that created a massive problem: now Renault cannot do anything without Nissan’s blessings, and vice versa.
Renault may only sell its Horse ICE division to Geely if Nissan agrees with that 15 photos
Photo: Renault and Geely
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The latest episode in this automotive mess was Renault’s urge to sell its internal combustion engine (ICE) branch to Geely. Reuters now reports that the deal may not proceed because Nissan is not willing to see technologies it developed in the hands of the Chinese automaker.

It is not difficult to understand what is at stake. Renault has a plan to go fully electric, which it called Renaulution. That is why it decided to offer its ICE branch – called Horse – to Geely: it does not want it anymore! It will just buy the combustion-engined cars it still has to sell, while it has no electric vehicles to fit the market segments in which it wants to be present.

On the other hand, like most other Japanese automakers, Nissan does not want to sell only electric cars right now. The Nissan Leaf apparently taught the company a few lessons on the current battery technology, and it only wants to move forward when solid-state cells are ready. In other words, it wants to keep its combustion engines for the time being.

The problem is that many Renault vehicles use Nissan engines or technologies. Nissan also employs some Renault solutions in its combustion-engined cars. It may have to pay royalties to Geely to keep using them in its vehicles. There are even things both companies developed together for both of them to use: who will decide who owns them if Geely buys the ICE business?

According to Reuters, Nissan wants to be sure everything that it owns related to combustion engines and hybrid solutions – such as e-POWER – are protected in any deal Renault and Geely eventually make. This is also why Nissan and Mitsubishi are still studying if they will join Renault’s electric car branch or if they will pass it. Anything that is transferred to Ampere has to remain there.

At this point, even Nissan shareholders must be asking if Carlos Ghosn should not have merged the two companies soon after he recovered the Japanese carmaker. It would be better than watching what looks like a bitter divorce process in which everything in the house has to be properly divided.
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About the author: Gustavo Henrique Ruffo
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Motoring writer since 1998, Gustavo wants to write relevant stories about cars and their shift to a sustainable future.
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