Renault SA and alliance partner Nissan Motor Co. will develop and make electric-car batteries in a French government-backed joint venture with the country's CEA energy research agency.
The FSI sovereign wealth fund will also buy a stake in the new company, Renault Chief Executive Officer Carlos Ghosn and French Industry Minister Christian Estrosi said today at a news conference near the site of the planned 600 million-euro ($892 million) battery plant outside Paris.
"This will be the center of our lithium battery production for all of our assembly plants and for other carmakers," Ghosn said. "It's a major investment."
The cost, weight and limited range of electric-car batteries are among the obstacles for automakers banking on mass demand for the vehicles. Ghosn's Renault-Nissan alliance has already committed 4 billion euros of investment in planned electric cars. They include the Zoe subcompact to be built at the same site in Flins, northwest of the French capital, and introduced in 2012 with an annual sales target of 100,000 units.
Renault, France's second-largest carmaker, will invest 180 million euros of cash and production assets in the new venture, Estrosi said. The FSI fund will provide 125 million euros for a stake that is to be determined.
The CEA will contribute 30 million euros, mainly in the form of patents on lithium battery technologies, said Jacques Verdonck, strategy director for Boulogne-Billancourt-based Renault, in an interview after the news conference.
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