The Renault-Nissan alliance has increased its bets on China’s electric-vehicle market, the world’s biggest, by forming a new venture to produce battery-powered automobiles that meet the country’s tighter emissions rule.
Renault SA and Nissan Motor Co. will each hold 25 percent of eGT New Energy Automotive Co., which will be 50 percent owned by Dongfeng Motor Group Co., the automobile alliance said in a statement Tuesday.
The partners will design a new EV based on a small sport utility vehicle platform developed by the alliance, it said. Investment details weren’t provided.
Automakers are accelerating their investments into electric vehicles to meet stricter emission and fuel-economy rules set to take effect in major markets.
China is implementing a cap-and-trade framework next year that will penalize carmakers that don’t meet fleet-based limits through fines or purchase of credits.
Last week, Ford Motor Co. said it will explore setting up a venture with Anhui Zotye Automobile Co. to produce EVs.
In May, Volkswagen AG received approval for a new venture with Anhui Jianghuai Automobile Group to produce electric cars.
Daimler AG and BMW also have electric car brands under their partnerships with BYD Co. and Brilliance China Automotive Holdings Ltd.
Nissan will start selling an electric car based on Renault’s Kwid model in China in 2019, with a price of about $8,000, Renault-Nissan alliance Chairman Carlos Ghosn said in interviews earlier this year.
Nissan has struggled to sell the Leaf electric car, sold as the Venucia e30, in the country since 2014 mainly because its price was too high compared with most locally made EVs.
Dongfeng currently makes Kadjar SUVs with Renault and Teana sedans with Nissan in China.
Nissan this month sold its battery subsidiary Automotive Energy Supply Corp. to Chinese private equity firm GSR Capital for about $1 billion.
China scooped the six top slots in a global index of electric vehicle manufacturers in a sign its strategy to develop the sector may be making headway. BYD, Jiangling Motors Corp. and BAIC Motor Corp. led a group whose scores were between double and more than eight times as high as scores for European and Japanese automakers. U.S. carmakers did not make the top 10.