Nissan Motor has finalised plans to invest in Renault’s electric-vehicle (EV) venture Ampere, capping months of negotiations to rebalance the troubled automotive alliance.

Nissan will invest as much as 600 million euros (S$880.8 million) in the business, the companies said on Wednesday (Jul 26). Separately, the pair formalised a deal for Renault to reduce its ownership of Nissan to 15 per cent by placing the rest of its current 43 per cent shareholding in a French trust.

“These agreements provide us with a solid base to reactivate business operations worldwide in key markets, with the potential to generate hundreds of millions in value,” Renault chief executive officer Luca de Meo said. “They give us the strategic agility that we need more than ever in today’s rapidly evolving environment.”

The Ampere agreement is a vote of confidence for De Meo’s strategy. He’s been revamping the manufacturer’s corporate structure to better tackle the shift to EVs and bolster profits, while trying to fix the Franco-Japanese alliance that also includes smaller partner Mitsubishi Motors. The deal is expected to close in the fourth quarter. 

“It is difficult for us to do business in Europe alone, so investing in Ampere gave us an opportunity to connect with other companies,” Nissan CEO Makoto Uchida said. 

Mitsubishi said this week it will decide on investing in Ampere by the end of 2023 at the earliest. 

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The agreement hands the partners more freedom to pursue other projects. Renault is pooling its legacy combustion-engine assets with China’s Zhejiang Geely and is working with Qualcomm on semiconductors. Nissan is shifting to EVs and cutting costs as part of a plan to make more money from each car it sells.

The companies presented an in-principle deal to rebalance the alliance in February, but finalising it dragged on longer than expected, with weeks spent trying to iron out sticking points on intellectual property as well as the Ampere investment. Renault in June pushed back the timing of the EV arm’s initial public offering following investor feedback.

Over the years, cultural differences between France and Japan led to frequent misunderstandings, further exacerbating the mutual suspicion that had weighed on the alliance. Talks almost collapsed late last year amid a power struggle within Nissan. They accelerated after the departure of a key Nissan executive, Bloomberg reported last month. 

De Meo has worked closely with Uchida to identify a series of common projects to rekindle the relationship. Those projects are proceeding well, de Meo said last month.

Both Renault and Nissan are under pressure as competition from Tesla and Chinese EV makers intensifies. This forced the partners to try to salvage a strained relationship that risked collapsing after a series of dramatic events, including the arrest of former alliance chief Carlos Ghosn in 2018 and his daring escape from Japan a year later. BLOOMBERG