Renault-Nissan-Mitsubishi accelerates towards electric, self-driving, shared cars

Three waves of disruption are set to shake up the automotive industry: electrification, autonomous driving, and ride-sharing. All three are intertwined and about to make even more rapid progress in the near future.

Traditional car companies are scrambling to adapt. Some have launched sub-brands to develop hybrid and electric vehicles, while others are teaming up with startups from Silicon Valley.

This week, Renault-Nissan-Mitsubishi (RNM) announced the launch of Alliance Ventures, a corporate venture capital fund that will invest in new technology, mainly in the fields of vehicle electrification, autonomous driving systems, connectivity, artificial intelligence, and new mobility typified by ride sharing.

Alliance Ventures will invest up to $1 billion over the next five years, with $200 million going to startups and partnerships in 2018.

RNM foresees that Alliance Ventures will be the largest corporate venture capital fund in the automotive industry.

Alliance Ventures’ first investment is in Ionic Materials. The US-based company is developing cobalt-free solid-state battery materials.

Ionic is developing a solid polymer electrolyte that will enable production of higher-energy density batteries for cars and other uses.

Alliance Ventures’ strategy is to offer potential partners access to the global market through RNM.

RNM sold more than 10 million vehicles in 2017 and has presence in all major automotive markets.

Alliance Ventures’ $200 million initial investment will be in addition to the more than $8.5 billion in total annual research and development investments by the Alliance members.

A main reason for the formation of the RNM alliance is to drive down costs and share resources for the advancement of the brands’ technology.

The new venture will complement this scheme.

Alliance Ventures will be funded jointly by Renault (40 percent), Nissan (40 percent) and Mitsubishi Motors (20 percent), and will be steered by a dedicated investment committee.

Alliance Ventures will be headed by François Dossa, who has more than 20 years of experience in investment banking, plus six years of experience within the Alliance, most recently as chief executive officer of Nissan Brazil.

The goal is to launch 12 pure electric models by 2022, with common EV platforms and components, launch 40 vehicles with autonomous driving technology, and develop robo-vehicle ride-hailing services.

Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi, said: “Our open innovation approach will allow us to invest and collaborate with startup companies and technology entrepreneurs, who will benefit from the global scale of the Alliance. This new fund reflects the collaborative spirit and entrepreneurial mind-set at the heart of the Alliance.”

RNM is targeting combined revenues of $240 billion and annual unit sales of more than 14 milion cars by the end of 2022.

“This investment initiative is designed to attract the world’s most promising automotive-technology start-ups to the Alliance,” said Ghosn.