Renault-Nissan moves to power up electric vehicle vision

The Renault-Nissan Alliance took another step towards its goal of delivering mainstream electric vehicles yesterday, signing a deal with the French Atomic Energy Commission and the French Strategic Investment Fund (FSI) to set up a joint venture to manufacture batteries for use in electric cars.

Batteries produced by the joint venture will be available for sale to any manufacturer, but will also be used to power Renault-Nissan's planned fleet of electric vehicles which the coalition aims to bring to market by 2012.

Carlos Ghosn, chief executive of Renault-Nissan, said the deal was an example of the type of public-private partnership that will be needed to finance the rapid rollout of electric vehicles.

"We welcome the vision and commitment made today by the French government, the CEA and the FSI to invest with the Renault Nissan Alliance in the future of clean transportation," he said.

Under the deal, the FSI will invest €125m (£112m) in the €600m venture, while the European Investment Bank is also considering stumping up a €140m loan for the project.

Production capacity is targeted at 100,000 batteries a year from 2012. Manufacturing by the new firm will begin at Renault-Nissan's plant in Flins, which will also manufacture the group's first electric vehicle, currently known as the Zoé Z.E. Concept, from 2012.

As the market for electric vehicles expands, Renault-Nissan said it will begin manufacturing the batteries at other plants in France, Portugal and the UK to supply electric vehicles built around Europe and Turkey.

The Flins plant will also develop technology to recycle batteries onsite.

The deal is a boost to the French government's plans to have a fleet of 100,000 electric vehicles in use across the country by 2015. It recently introduced a consumer incentive of up to €5,000 for the purchase of an electric vehicle and is investing €900m in a charging infrastructure.

Gilles Michel, general manager of FSI, said the fund hopes to create a stable supply chain for electric vehicles. "By participating in a joint venture that holds great potential for the future of the auto industry, the FSI reaffirms its conviction that the [auto] industry still has much to contribute to France’s competitiveness," he said.