BEIJING -- Renault-Nissan has increased its bets on China's electric-vehicle market, the world's biggest, by forming a new venture to produce battery-powered vehicles that meet the country's tighter emissions rules.
Renault and Nissan will each hold 25 percent of eGT New Energy Automotive , which will be 50 percent owned by Dongfeng Motor, the alliance said in a statement Tuesday. The partners will design a new EV based on a small SUV platform developed by the alliance, it said. Investment details weren't provided.
Automakers are accelerating their investments into electric vehicles to meet stricter emission and fuel-economy rules set to take effect in major markets. China is implementing a cap-and-trade framework next year that will penalize carmakers that don't meet fleet-based limits through fines or purchase of credits.
Dongfeng acquired a 14 percent stake in PSA Group in 2014 and makes Aircross SUVs and Picasso minivans under the Citroen nameplate. It also partners with Honda and Kia to make Civic and KX Cross cars in China, respectively.
Last week, Ford said it will explore setting up a venture with Anhui Zotye Automobile to produce EVs. In May, Volkswagen Group received approval for a new venture with Anhui Jianghuai Automobile Group to produce electric cars. Daimler and BMW Group also have electric car brands under their partnerships with BYD and Brilliance China Automotive Holdings.
Nissan will start selling an electric car based on Renault's Kwid model in China in 2019, with a price of about $8,000, Renault-Nissan alliance Chairman Carlos Ghosn said in interviews earlier this year. Nissan has struggled to sell the Leaf electric car, sold as the Venucia e30, in the country since 2014 mainly because its price was too high compared with most locally made EVs. Dongfeng currently makes Kadjar SUVs with Renault and Teana sedans with Nissan in China.
The three-way alliance of Renault, Nissan and Mitsubishi Motors is the world's leading electric car maker for the mass-market segment, with cumulative sales of models including Leaf, Renault's Zoe and Mitsubishi's i-Miev topping 481,000 units as of the end of June.
Nissan this month sold its battery subsidiary Automotive Energy Supply to Chinese private equity firm GSR Capital for about $1 billion.
China scooped the six top slots in a global index of electric vehicle manufacturers in a sign its strategy to develop the sector may be making headway. BYD, Jiangling Motors and BAIC Motor led a group whose scores were between double and more than eight times as high as scores for European and Japanese automakers. U.S. carmakers did not make the top ten.
The Chinese government plans to increase the annual output of new-energy vehicles -- its term for battery-electric vehicles, plug-in hybrids and fuel cell vehicles -- to 2 million units by 2020. Such automobiles are expected to make up more than one fifth of the total sales by 2025, according to the latest auto industry plan released by the Ministry of Industry and Information Technology.