Huge Advantage: Renault-Nissan Charges Into Chinese EV Market

Global OEMs are pushing mightily to secure their share of the world’s largest market for electric vehicles, China. On Tuesday, the Renault-Nissan Alliance announced a new joint venture with China’s Dongfeng. Under the name eGT New Energy Automotive Co., the JV will focus on electric vehicles only. This comes after Volkswagen Group entered an EV joint venture with China’s JAC, and after Ford announced plans to do the same with China’s Zotye. Other automakers better hurry: China is expected to announce stringent quotas on EV sales any day now. The Renault-Nissan Alliance may have a leg up on the competition: It looks like it can sell its cars under its own brands.

According to an emailed statement, a new EV “will be jointly developed by the Alliance and Dongfeng on an A-segment SUV platform of the Renault-Nissan Alliance.”

The A-segment SUV platform of the Renault-Nissan alliance most likely is the CMF-A platform that underpins Renault’s low-cost A-segment Kwid and Datsun’s redi-Go.  It is an open secret in the business that the platform’s leader, Gerard Detourbet, has been spending a lot of time in China, fulfilling Carlos Ghosn’s plans for a low-cost EV.

Renault spokesperson Florence de Goldfiem confirmed that an “A-SUV EV designed by eGT will be sold with the Renault Logo in 2019.”

This would be a big breakthrough for Renault, and a key to its success in China. Until now, foreign OEMs were hampered by China’s desires that made-in-China EVs should not be sold under the foreign brand, but would have to be sold under a Chinese brand owned by the joint venture. Nissan could not sell a Made-in-China Leaf, and instead had to offer it as a Venucia e30 – to very limited success. Quite recently, China’s top regulator, the National Development and Reform Commission (NDRC) refused an application by Volkswagen to sell EVs made by a joint venture with Chinese carmaker JAC under Volkswagen’s SEAT brand. The vehicles will be sold under a new brand.

“No foreign brands for new branded NEVs” used to be the policy of the Chinese government, an insider told the Financial Times. Stripped off their brand-power, foreign makers lose their edge in the highly competitive Chinese market. A Renault EV would have it much easier.

While global OEMs are charging into China’s EV business, Californian carmaker Tesla is lagging behind. There have been repeated rumors that Tesla may produce its cars in China, but the rumors never became reality. China’s “No foreign brands for new branded NEVs” policy would be a huge impediment to Tesla. Do the Renault news mean that China’s coast is clear for Tesla? Not exactly. The fact that Renault may have received permission to use its brand does not automatically mean that others may use their brand as well, as Volkswagen’s example illustrates. OEMs will have to ask the NDRC, and the NDRC can decide as it pleases.