World’s largest automotive alliance launches $1bn fund for future driving innovations

The Renault-Nissan-Mitsubishi alliance is expected to invest around $200m this year alone into start-ups and open innovation partnerships that will assist with the respective carmakers’ plans to rollout electric and autonomous vehicles.

Further annual investments have already been scheduled, and the group’s Alliance Ventures fund looks set to become the largest corporate venture capital fund in the automotive industry by 2022 at the latest.

The Renault-Nissan-Mitsubishi alliance’s chief executive Carlos Ghosn said: “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. This new fund reflects the collaborative spirit and entrepreneurial mind-set at the heart of the Alliance.”

The venture fund is offering start-ups the chance to combine new technologies with the global scale and research and development departments of the alliance members, which has reached more than €8.5bn in studies and projects. The three carmakers sold more than 10 million vehicles in 2017 alone.

The investment portfolio is a strategic vision of Alliance 2022, which was launched last year by Renault-Nissan-Mitsubishi. Successful projects and innovations must align to the objectives of Alliance 2022, which seeks to double the annualised synergies of the three motor companies to more than €10bn by 2022.

Alliance Ventures will be led by the chief executive of Nissan Brazil, and seeks to create cost-savings for projects and products related to electric vehicles (EVs), autonomous driving and vehicle connectivity. By the end of Alliance 2022, the three members will have launched 12 pure EV models and equipped 40 vehicle models with autonomous and ride-hailing devices.

Funding the future

The first deal through the venture has already been signed. US-based Ionic Materials is developing solid-state cobalt-free battery materials. Companies like Apple have recently started treating cobalt as a conflict mineral. Ionic Materials’ solution also improves the performance and costs of automotive batteries.

Renault and Nissan will account for 80% of the fund, with Mitsubishi Motors providing the final 20%. A dedicated investment committee will have final say on funding decisions. As part of Alliance 2022, the three carmakers are forecasting combined revenues of $240bn, with annual car sales exceeding 14 million by 2022.

Last year, Renault revealed plans to tap into the EV and autonomous driving (AD) markets to help deliver annual revenues of more than €70bn by 2022, as part of the company’s Drive the Future strategy.

The plan will leverage an €18bn research and development investment, which will be backed by other investments from the Renault-Nissan-Mitsubishi alliance.

Matt Mace