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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