The corporate VC fund is called Alliance Ventures, and it will finance new developments in the areas of electrification, autonomous driving and battery technology.
At CES 2018 in Las Vegas last week, Renault-Nissan-Mitsubishi Alliance, the world’s largest automotive partnership, announced it will invest $1 billion to fund mobility start-ups globally over five years. The corporate VC fund is called Alliance Ventures, and it will finance new developments in the areas of electrification, autonomous driving and battery technology. In an interaction with the global media, including the Financial Express, Carlos Ghosn, the chairman & CEO of the Alliance, said, “This investment is designed to attract the world’s most promising auto-tech start-ups to the Alliance.” He also talked about the future of autonomous driving, shared mobility and electric cars. Excerpts:
Is autonomous driving coming earlier than what we had thought a few years ago?
There are three areas to autonomous driving. First is the driverless car or robo-taxi—a car which drives itself fully. Second, you decide when you want to drive the car and when the car drives you. Third is the enhanced driving experience—i.e. the car helps you drive better. At CES 2018, for example, the Nissan booth displayed the Brain-to-Vehicle technology, which interprets signals from the driver’s brain to assist with driving and help the vehicle learn from the driver—this is the enhanced driving experience. Then you have the prototypes and mass-marketing. There are many prototypes already—companies and cities and areas where autonomous driving is taking place. But this is not a represented volume. As far as mass-marketing of each level of autonomous driving is concerned, we believe it’s going to happen in the next six years. Today, Google and Uber and Amazon are interested in transportation with no driving, and so this is a market we cannot neglect.
How do you position the Alliance as far as technological advancement in autonomous driving and electric vehicles is concerned?
You have the battle of the waves, where everyone is making statements. And then you have the battle on the ground—i.e. who is selling what and at what level. On electric cars, there’s a huge battle of the waves. Every carmaker says it will bring 10, 20, 30 cars over the next few years. But when you see how much they are selling today, i.e. on the ground, there might be none. Right now, the Alliance is, by far, the largest producer and seller of electric cars. We are not going to relinquish this lead. When it comes to the ground, you can measure. When it comes to statements, nobody knows who is going to deliver, when, how, how much and so on. Similarly, in autonomous driving, Nissan has sold 75,000 cars with autonomous driving feature, mainly in Japan. Now these cars are coming to the US. Here too, on the ground, the Alliance has an advantage.
How will Alliance Ventures, the new VC fund, benefit tech start-ups?
Our open innovation approach will allow us to invest and collaborate with auto-tech start-ups, who will, in turn, benefit from the global scale of the Alliance. In fact, Alliance Ventures will be located within the various innovation hubs across the world, including the Silicon Valley, Paris, Beijing, Tokyo and Mumbai. This fund is meant to be a one-stop shop for start-ups looking to partner with the Alliance. We have great intentions. Now we want to be sure that our reality sticks.
With this fund, what is the statement you are sending to the tech community?
At the heart of this endeavour is the knowledge that future technologies, including tech that might not have even been thought of yet, will be expensive, and it might not be a smart thing to spend billions developing in-house tech at three separate brands—Renault, Nissan and Mitsubishi. We can’t do everything by ourselves. Outside companies and start-ups might have ideas about the future of the automobile that carmakers themselves don’t have. A partnership with start-ups is a forward-looking way of eliminating the myopic processes that many automakers have struggled with.
In the future, will you keep selling cars or will everything be shared mobility?
It depends on what is the horizon you are looking at. In my horizon, I expect we’ll continue selling cars. But it won’t be our only business. We have a huge opportunity into selling mobility services, particularly urban mobility. But yes we will keep selling cars, considering that in emerging markets the level of motorisation is very low—20 cars per 1,000 people in Indonesia and 40 per 1,000 in India. Even in some provinces in China, whose population is more than some European countries, there are fewer than 50 cars per 1,000 people—in fact, 70% of car-buyers in China are first-time buyers. So, statistics show that our normal business of selling cars has a long way to go. At the same time, in developed markets, people have different mobility needs, so we have to cater to them. We will continue to do business as usual, but we also need to invent a new business around mobility services.