PARIS/BEIJING – The Renault-Nissan Alliance and Dongfeng Motor Group Co., Ltd. announced on August 29 that they have set up a new joint venture – eGT New Energy Automotive Co., Ltd. – to co-develop, produce and sell electric vehicles.
Renault and Nissan will each hold 25 percent shares of eGT, while Dongfeng will hold the remaining 50 percent.
The new JV will focus on the core competencies of each partner and will harness the full potential of the Renault-Nissan Alliance EV leadership, as well as the resources of Dongfeng in the new energy vehicle industry, to meet the expectations of the Chinese market.
eGT will design a new EV with intelligent interconnectivity, which will be jointly developed by the Alliance and Dongfeng on an A-segment SUV platform of the Renault-Nissan Alliance. It will draw on the global leadership on EV technologies and cost-effective car design experience from the Alliance, and the competitive manufacturing costs from Dongfeng.
“The establishment of the new joint venture with Dongfeng confirms our common commitment to develop competitive electric vehicles for the Chinese market,” said Carlos Ghosn, chairman and CEO of the Renault-Nissan Alliance.
“This project is the result of a joint effort to develop electric vehicles for the Chinese market, by the ‘Golden Triangle’ formed by Dongfeng, Renault and Nissan, with an innovative business model,” said Zhu Yanfeng, chairman of Dongfeng. “We expect to meet the transformation trend of the market in China where cars are becoming light, electric, intelligent, interconnected and shared.”
eGT will be based in Shiyan, Hubei Province, where the EVs will be produced at a plant that has an annual output capacity of 120,000 vehicles. Production is expected to start sometime in 2019.
While the partners said in a statement that their move aims to tap the potential of the fast-growing Chinese segment of the market, it is also clearly one that has the intention of helping Renault-Nissan meet China’s stringent NEV credit policy which was supposed to begin next year with a requirement of selling enough EVs with credits equivalent to 8 percent of sales. The implementation of that policy reportedly has been delayed until 2019 requiring NEV credits to account for 10 percent of sales.
eGT follows JAC-Volkswagen, Great Wall-Yogomo, Daimler-BAIC and Ford-Zotye as JVs established with an aim to help the partners satisfy the NEV credit requirements.