Another major automaker is setting up a dedicated joint venture to build EVs for the growing demand in China, joining Ford and Volkswagen: This time, it’s Nissan-Renault, which will work with China’s Dongfeng Motor, an automaker it partnered with last year to open its first factory in China.
Automakers from outside China basically need a local dancing partner in order to make and sell vehicles in the country, without incurring huge import taxes that would basically render their operations unsustainable. Previously, automakers were limited to setting up two joint ventures with Chinese partners to produce cars in-country, but Beijing has allowed the creation of a third joint venture – provided it’s dedicated entirely to EVs.
Renault-Nissan’s new partnership with Dongfeng is called eGT New Energy Automotive Company, and it’ll be split between Nissan with 25 percent ownership, Renault with another 25, and Dongfeng with the remaining 50, according to Reuters. The first vehicle from the JV will be a new electric vehicle based on one of Renault-Nissan’s subcompact crossover SUV platform designs.
Automakers are racing to build out their EV construction and sales capacity in China thanks to strong incentives put in place by the Chinese government for the market. China is also enforcing strict quotas on overall vehicle sales, requiring that a full 8 percent of any automaker sales in the country be either pure electric or plug-in hybrid by 2018, with incremental increases in that percentage every year after that.
This could end up helping with electrification abroad, too, since it’ll help automakers reconfigure their operations to focus on developing EV tech and electric-specific vehicle designs.