Renault SA is closing in on a pact with a unit of China’s Envision Group to produce batteries for its future electric-vehicle manufacturing hub in northern France, according to people familiar with the plan.
The partnership with Envision AESC is part of a broader plan, to be outlined by President Emmanuel Macron on Monday, that could see Renault also take a stake in French battery startup Verkor, said the people, who asked not to be named before the information is made public.
Renault is also still talking to ACC -- a venture of rival Stellantis NV and TotalEnergies SE -- about a potential third battery deal, the people said.
Representatives for Renault, Envision, Verkor and ACC declined to comment.
Renault’s jostling for batteries adds to evidence that the race among European automakers to ensure adequate supplies for their electric cars is gathering pace. Porsche and Volvo Car Group on Monday announced plans to produce batteries, and Peugeot maker Stellantis NV will update investors on its EV strategy next month. Volkswagen AG made a massive bid for the pole position in March when it unveiled a multi-billion-euro plan for six European battery factories.
Electric Hub
Envision AESC’s factory would be located at Douai, where Renault is developing a hub to make EVs including the future Renault 5 model. It will have a capacity of 43 gigawatt-hours by the end of the decade, with just over half earmarked for the French carmaker, according to a building permit a pplication.
The cost of the project could reach as much as $2.9 billion depending on its timeline, according to James Frith, an analyst at BloombergNEF.
Renault’s decision to buy batteries from Japan-based Envision AESC can be traced to its ties with Nissan Motor Co., which sold a controlling stake in its AESC battery operations to Envision in 2018 but retained a 20% holding.
The project would represent welcome foreign investment into France’s beleaguered industrial sector and come amid a European Union push to increase the region’s battery output, a sector that has long been dominated by China’s Contemporary Amperex Technology Co. Ltd. and South Korea’s LG Energy Solution.
The Next Electric-Car Battery Champion Could Be European (1)
The Douai vehicle assembly plant is one of three sites Renault plans to combine and turn into an EV hub capable of churning out some 400,000 cars a year.
The so-called ElectriCity is a key part of Chief Executive Officer Luca de Meo’s strategy to turn around Renault. With the French state as its most powerful shareholder, Renault has come under pressure to preserve jobs and keep EV technology in the country.
The carmaker currently buys batteries from LG Energy Solution in Poland for its Zoe model, an arrangement that’s expected to carry over to the upcoming Megane EV lineup planned for next year.
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