Autos

David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

The world's biggest electric-car maker is losing its edge.

No, not Tesla Motors Inc., which barely sold more electric vehicles than Volkswagen AG in the December quarter. Nor BMW AG, producer of the i3, nor even BYD Co., the dominant player in China's domestic market. 

It's the alliance of Renault SA, Nissan Motor Co. and Mitsubishi Motors Corp. that has outrun the competition so far. About one in four electric vehicles manufactured to date has been under one of the three marques, according to Bloomberg New Energy Finance data.

Charge!
Competitors have narrowed the volume gap with Renault-Nissan-Mitsubishi
Source: Bloomberg New Energy Finance, Gadfly calculations
Note: Mitsubishi became part of the alliance in October 2016. The three marques are put together for the entire period.

The triple alliance has sold more than 100,000 vehicles in each of the last three calendar years. BYD is the only other carmaker to have achieved that milestone, in 2016.

Unlike most of its rivals, the alliance even has a comprehensive range -- from Mitsubishi's plug-in hybrid Outlander SUV and Renault's Kangoo van, right down to the doors-optional two-seater Renault Twizy, via some of the best-selling conventional electric vehicles in the form of Nissan's Leaf and Renault's Zoe.

Pole Position
Nissan is by far the biggest player in the alliance
Source: Bloomberg New Energy Finance
Note: Mitsubishi became part of the alliance in October 2016.

So what ails the trio's ambitions? Deliveries of the Nissan Leaf, the best-selling electric car, peaked all the way back in 2014. Mitsubishi's Outlander PHEV, the most successful plug-in hybrid SUV, saw sales fall by about 50 percent from a year earlier in the third and fourth quarters of 2016. Only Renault's Zoe, which does well in Europe but isn't sold anywhere else, held up well last year in volumes.

At last week's Shanghai Motor Show, however, the lineups from all three automakers focused on crossovers and SUVs. That's probably sensible, given the way that size class is set to become dominant in China this year, but it still suggests that progress on unifying the group's electric-vehicle platforms remains a way off.

"I'm amazed to see how many EVs are shown here," Daniele Schillaci, Nissan's executive vice-president for global marketing and sales, commented in a company video from the event.

Integrating emerging technology across a global group producing close to 10 million cars a year takes more than the push of a key-fob button. Still, economies of scale through joint development are what the Renault-Nissan alliance is meant to be all about, and to date that's been lacking in electric vehicles.

There are signs that this is changing. The Zoe's platform will be abandoned and the Leaf made into the basis for the three marques' electric cars, with a price around $17,000, the Nikkei Asian Review reported in December, without saying where it got the information. The Outlander PHEV will be made the basis of a new Nissan electric SUV, Chairman Carlos Ghosn told the paper a few days earlier.

Nissan is even looking to sell its stake in a rechargeable-battery venture with NEC Corp., Reuters reported last year, ending the absurd situation where an alliance that prides itself on joint procurement was making its own cells for the Leaf and purchasing them from LG Chem Ltd. in the case of the Zoe.

The change can't come too soon. General Motors Co.'s Chevrolet Bolt has doubled the driving range available from the Leaf, and stands a good chance of undermining it as sales pick up this year.

California Dreaming
Tesla's market cap is almost as great as Nissan, Mitsubishi and Renault put together
Bloomberg
Note: Market capitalizations of Nissan and Renault are adjusted for equity stakes in group companies. Nissan valuation is Nissan's market cap minus 34 percent of Mitsubishi's market cap. Renault valuation is Renault market cap minus 44 percent of Nissan's market cap.

Tesla's Model S overtook the Leaf as the world's best-selling electric vehicle last year, and its mass-market-focused Model 3 will start production within months. Germany's big three automakers have ambitious plans to roll out electric models, and even Toyota Motor Corp. is seeing that there's life beyond the Prius.

All these developments put pressure on the designers of the new Leaf, due to be unveiled later this year. It needs to be a blockbuster. Right now, Renault-Nissan-Mitsubishi's electric-vehicle plan is starting to look like less than the sum of its parts.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net