Renault and partner Nissan Motor will soon be building electric cars with Dongfeng Motor in China under a new joint venture, as automakers worldwide rush to be prepared for the stringent quotas for electric vehicles being introduced in the country.
China, the largest auto market in the world, wants hybrid and battery-powered electric vehicles to represent a minimum of 20% of the auto sales in the country by 2025. This is part of the country’s solution of tackling the alarming levels of pollution in its major cities.
Ford Motor announced in early August that it was exploring the possibility of establishing a joint venture with Anhui Zotye Automobile to build its electric vehicles under a different brand in China.
Daimler AG, General Motors and Tesla have announced their own plans already for making electric vehicles in the world’s largest auto market.
The new Nissan-Renault joint venture with Dongfeng is called eGT New Energy Automotive and will be 25% owned by each Renault and Nissan and 50% owned by Dongfeng, said Renault and Nissan in a joint statement Tuesday from China.
The statement added that eGT would design a new fully electric vehicle on a platform of a subcompact crossover SUV from the Nissan-Renault alliance.
Establishing this new venture with Dongfeng is confirmation of our commitment to the developing of competitive electric vehicles to be used in the Chinese market, said CEO and chairman of the Nissan-Renault alliance Carlos Ghosn in a prepared statement Tuesday.
The statement had no details of the different financial commitments for the partners in the joint venture, nor did it say when the first vehicles would be launched. Nissan is already partners with Dongfeng in China.
Both Renault and Nissan already are marking their own electric cars. The Leaf from Nissan is a compact hatchback that has become the top-selling electric vehicle in the world since launching in 2010. Renault started selling Zoe its electric car model in 2012.
China has become the game changer when it comes to global automakers, as many until just recently resisted a shift in the industry to electrical vehicles. However, China is an auto market with strong growth potential where strict policies that favor cleaner energy vehicles are aggressively pursued.
Under the latest proposals in China, sales quotas for electric vehicles, which should take effect starting early next year, will require 8% of sales of automakers to be plug-in hybrid or battery powered vehicles by 2018, increasing to 10% in 2019 and 12% in 2020.