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CES: Renault-Nissan-Mitsu Alliance turns to start-ups

Future investment: Although technically a corporate venture capital fund, Renault-Nissan-Mitsubishi chief Carlos Ghosn said the newly formed Alliance Venture is looking for a technological return on investment as well as a financial one.

World’s biggest auto alliance looks for mobility tech partners via $US1b venture

Nissan logo10 Jan 2018

By TUNG NGUYEN in LAS VEGAS

THE Renault-Nissan-Mitsubishi Alliance has pledged to invest up to $US1 billion ($A1.28 billion) over the next five years in start-ups that are pioneering mobility technology including autonomous systems, connectivity, electrification and artificial intelligence (AI).

Speaking at the Consumer Electronics Show (CES) in Las Vegas this week, Renault-Nissan-Mitsubishi chairman and chief executive Carlos Ghosn said its newly formed corporate venture capital fund – dubbed the Alliance Venture – will help the automotive giant innovate and evolve vehicle technologies.

“We can’t do everything by ourselves,” he said. “Obviously, a lot of things are going to be done by us, but we are going to need a lot of creativity coming from outside. We want to make sure we are being challenged by people thinking in a different way.

“It is always impressive what is coming every year and it is impressive to see how much a company I have seen last year develop into a powerhouse in a very short period of time because they are really knocking at the right items and they are really hitting with the right technology.”

With the goal of fostering relationships with start-ups and coming in at the ground level of emerging technologies, the Alliance Venture’s first investment will be in solid-state battery specialist Ionic Materials.

However, no timeframe was given on the cost or when the new electric vehicle technology would be ready for mass-market launch.

Feeding directly into Renault-Nissan-Mitsubishi’s mid-term Alliance 2022 plan that will see the car-makers roll out 12 new all-electric models, consolidate vehicle technologies and platforms among all brands and boost EV sales to 500,000 units annually, Alliance Ventures will be jointly funded by Renault, Nissan and Mitsubishi who will contribute 40, 40 and 20 per cent respectively.

Around $US200 million ($A255m) will be invested each year.

Mr Ghosn said there was room for those numbers to go up or down depending on the suitability of emerging technologies, but that the money was just a fraction of the car-maker’s research and development expenditure.

“We are talking about $200 million as an amount allocated for the first year (and) we will continue on this rhythm for the mid-term plan,” he said.

“This being said, even if we spend $1 billion because we see the right opportunities and we see the right technologies, it is still two per cent of the total amount that would be investing to develop the technology that we see coming onto the different market – I want to put it into context.

“We are in an industry that is in full transformation. We have an idea of what the car is going to be four or five years down the road, but there may be a lot of things happening in the next five years.

“We just have to see the evolution of the technology, it is going really very fast, and we need every year to reconsider our plan to make sure it is always adequate.”

Alliance Ventures will be headed by former investment banker Francois Dossa and have a dedicated committee to make investment decisions, with offices in Silicon Valley, Paris, Yokohama and Beijing.

However, Mr Ghosn assuaged fears that Alliance Ventures would be intimidating for start-ups to work with given the Renault-Nissan-Mitsubishi Alliance is one of the largest car-making conglomerates in the world.

“That’s why we have settled a specific organisation in order to facilitate the start-ups and to potential partners, having just a one-stop shop where they can come and present their ideas,” he said.

“When one company finds an interesting idea and eventually wants to make a deal with that particular start-up, whether it’s in France, Israel, Beijing, in the United States … the three companies benefit.

“So making sure that this entity will be an alliance entity in the sense that (there will be) no duplication and everybody benefits when one company wants to do something.”

Mr Ghosn also differentiated Alliance Ventures from other corporate investment capital funds, saying the company was not simply seeking to make a return on investment but was instead investing in technology that it believes has a future.

“This is not an investment, we are not investing in start-ups in terms of ‘we want a return so what’s the best start-up’,” he said.

“We have a very specific focus on technology and on mobility services and building the transportation of the future, but at the same time Francois Dossa is a financial guy.

“He has the responsibility to make sure that we are making the best use of all this money when we are making the investment.”

According to Mr Ghosn, the Renault-Nissan-Mitsubishi Alliance is currently the largest producer and seller and EVs and autonomous technology-equipped cars in the world, a position it intends to hold in the future with new investments.

“For the moment, on electric cars, the alliance is, by far, the largest producer and seller of electric cars,” he said.

“We said we are not going to relinquish this, we are going to continue to bring a lot of zero-emissions cars – I’m talking pure electric, I’m not talking electrified or anything, I’m talking pure electric, zero emissions, for the moment we are the leader and we are intending to continue to be the leader.

“About autonomous cars today, when we look at the ground, how many cars with autonomous drive features are being sold in the world and who is selling them? Today, Nissan is the largest maker of autonomous drive, about 75,000 cars with autonomous drive features mainly in Japan.

“For the moment with autonomous drive and electric cars we are in good shape.”

Mr Ghosn said the Alliance Venture will be beneficial on both sides, as it offers the resources and experience of a global automotive player.

“Our open innovation approach will allow us to invest and collaborate with start-up companies and technology entrepreneurs, who will benefit from the global scale of the alliance,” he said.

“This new fund reflects the collaborative spirit and entrepreneurial mindset at the heart of the alliance.”

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