Wednesday, January 10, 2018

Renault-Nissan-Mitsubishi and Alliance Ventures at CES 2018






Las Vegas, January 9, 2018 - Renault-Nissan-Mitsubishi, the world’s leading automotive alliance, today announced the launch of Alliance Ventures, a new corporate venture capital fund that plans to invest up to $1 billion to support open innovation over the next five years.

In its first year, the fund expects to invest up to $200 million in start-ups and open innovation partnerships with technology entrepreneurs focused on new mobility, including vehicle electrification, autonomous systems, connectivity and artificial intelligence.

With further annual investments, Alliance Ventures is set to become the largest corporate venture capital fund in the automotive industry over the period of Alliance 2022, the strategic midterm plan launched last year by Renault-Nissan-Mitsubishi.









Carlos Ghosn, chairman and chief executive officer of Renault-Nissan-Mitsubishi, 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 new fund is unique because it offers potential partners access to the global scale and scope of Renault-Nissan-Mitsubishi, which sold more than 10 million vehicles in 2017 through 10 separate brands with a presence in all major automotive markets.

Alliance Ventures will invest in start-ups to bring new technologies and businesses to the Alliance while ensuring a fair financial return. The fund will make strategic investments at all start-up stages and will incubate both new automotive entrepreneurs and forge new partnerships.

The first deal by Alliance Ventures will be a strategic investment in Ionic Materials, a promising US-based company which is developing solid-state cobalt-free battery materials. The equity acquisition coincides with the execution of a joint-development agreement with the Alliance for the purpose of R&D cooperation. Ionic, based in Massachusetts, is the developer of a pioneering solid polymer electrolyte that enables improved performance and cost effectiveness of high-energy density batteries for automotive and multiple other applications.

By making such investments, Alliance Ventures will help identify and support the development of new technologies for potential use by Alliance members. Such initiatives are aligned with the objectives of Alliance 2022, which aims to strengthen cooperation and to double the annualized synergies generated by Renault, Nissan and Mitsubishi Motors to more than €10 billion by the end of 2022.

The $200 million initial venture capital investment comes in addition to more than €8.5 billion in total annual research and development investments by the Alliance members.

Alliance Ventures will be led by François Dossa, who has over 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 Alliance Ventures team will also draw on the expertise and business opportunities identified by a Cross-Functional Team of experts from Renault, Nissan, and Mitsubishi.

This initiative complements the Alliance strategy to seek incremental revenues, cost savings and cost-avoidance in areas including electrification, autonomous drive systems and vehicle connectivity. By the end of its strategic plan, the Alliance will launch 12 pure electric models, utilizing common EV platforms and components, while also bringing to market 40 vehicles with autonomous drive technology and developing robo-vehicle ride-hailing services.

Alliance Ventures will define innovation areas and geographic markets for investment, working with existing research and advanced engineering teams, and will recruit venture capital experts to develop the platform. It is expected to be co-located in Silicon Valley, Paris, Yokohama and Beijing, close to the technology and research centers of the Alliance member companies, as well as to areas with strong innovation ecosystems.

Renault (40%), Nissan (40%) and Mitsubishi Motors (20%) will jointly fund the entity, which will have a dedicated investment committee to make investment decisions and monitor their performance.

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


The Renault-Nissan- Mitsubishi Alliance will invest around $1 billion over the next five years to help it fund start-ups and other small tech companies that can help it bring to market electrified, connected and autonomous vehicle technologies, Alliance CEO Carlos Ghosn announced Tuesday.
The corporate venture capital, or CVC, fund is intended not only to give the Franco-Japanese alliance access to potentially breakthrough technology but to help it make decisions more quickly than is normally the case for a big corporation, Ghosn said during a news conference at the Consumer Electronics Show in Las Vegas.


“We can do everything ourselves,” explained the Brazilian-born executive. “We have to get access to people who think about things in different ways.”
Ghosn said Renault, Nissan and new Alliance member Mitsubishi expect to spend about $200 million annually through the fund





Ghosn expects the Alliance to launch a dozen EVs, like the Nissan Leaf over the next six years.

The tech fund is in line with what a number of other automakers have set up in their efforts to search for potentially breakthrough technology. BMW’s iVentures fund, for example, has about $600 million to spend on things like autonomous vehicle software and smart charging. General Motors has set aside $240 million for its GM Ventures, and PSA Group and Ford have their own funds in play.

Ghosn  at CES press coference was asked whether the fund was large enough to accomplish its goals. GM spent $1 billion just to acquire one start-up specializing in autonomous driving, San Francisco-based Cruise Automation. But the Alliance chief stazted that the CVC funding is a “massive amount” that could be “revised up,” if necessary.

It is, in fact, a relatively modest part of the R&D budget for the three manufacturers whom Ghosn noted together will spend “more than $50 billion over the next five years.” Much of that will go for new technologies and services, such as electrification and autonomous driving.

Renault, Nissan and Mitsubishi plan to roll out 40 autonomous vehicles and at least a dozen pure electric vehicles over the course of the current six-year business cycle.

Ghosn said that the industry is actually getting out ahead of consumer demand, spending what some analysts estimate at more than $100 billion over the next five years on just electrification and self-driving technology. So far, battery-based vehicles have yet to gain much market share, but the Alliance CEO insisted that the tipping point has been crossed and demand should start to rise.

The first semi-autonomous vehicles are already on the road. Nissan, for one, this year introduced its ProPilot Assist system on several models, including the second-generation Leaf battery-electric vehicle.
As with electrified vehicles – which includes hybrids, plug-ins and pure electric models – Ghosn noted there will be various forms of autonomy. These include systems that largely assist human drivers, technology that can take over the driving duties, or fully driverless systems that will likely show up first in so-called robo-taxis.

“This is going to happen,” Ghosn asserted, noting he expects all the various forms of autonomy will be in production over the next six years. “All the stars are lining up.”

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EDITED AND RELEASED BY AUTO ADVISOR GROUP

BRUCE HUBBARD
BRADLEY HUBBARD
JB HUBBARD
BONNIE LYNCH


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