Alliance Arguments: Daimler, Renault-Nissan Still Split on Battery Technology

Both Daimler and Renault-Nissan are already heavily invested into lithium-ion battery technologies, which may pose a problem for the new partnership formed last week.

Although the companies recently entered an alliance to exchange vehicle platforms and various technologies, batteries were not part of the formal agreement. Instead, the two firms will reportedly “be open” to using batteries from the other, which may cause some internal competition. “We are obviously going to do everything in order for our battery to be considered as the best,” Renault-Nissan CEO Carlos Ghosn recently told Bloomberg. The executive went on record as saying he “doubts” Daimler would be able to buy a better battery elsewhere on the market. Daimler CEO Dieter Zetsche insists he knows where to find a better battery: inside Daimler. “We have the production know-how and the financial muscle to secure a long-term competitive position.” Both firms are quite proud of the work they’ve done thus far on developing battery technology. Daimler is investing at least $200 million into a partnership with battery manufacturer Evonik, which will initially produce lithium-ion battery packs for the Smart Fortwo ED. Renault-Nissan, on the other hand, is deeply involved in a joint venture called Automotive Energy Supply Corporation with electronics giant NEC Corporation. The venture will ultimately have five plants across the world, allowing it to build batteries near production lines in England, France, Portugal, Japan, and the United States. Although analysts suggest Daimler will be reluctant to adopt others' technology (one of the many downfalls of the DaimlerChrysler merger), many suggest Nissan’s battery may ultimately win. “Daimler’s battery may have a technical edge,” Anil Valsan, a director of automotive research at Frost & Sullivan, “but Renault-Nissan’s solution may end up being more cost competitive.” Source: Bloomberg

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