Renault’s €9.5B Nissan Loss: Accounting Shift Signals Alliance Evolution

On July 1, 2025, Renault announced a seismic financial adjustment: a €9.5 billion ($11.2 billion) non-cash loss on its stake in Nissan Motor, marking a symbolic endpoint to one of the auto industry’s most turbulent partnerships. This technical accounting decision—triggered by Nissan’s 38% stock plunge over the past year—reflects deeper fractures in an alliance once hailed as a model for global automotive cooperation.

Why Renault Took the Hit

The loss stems from a fundamental accounting shift. Previously, Renault valued its 35.7% Nissan stake using the equity method, which incorporated Nissan’s operational performance into Renault’s income statement. Effective June 30, 2025, Renault now treats the stake as a financial asset measured at fair value through equity—meaning its worth is directly pegged to Nissan’s share price. With Nissan trading at just ¥341.8 per share (well below Renault’s carrying value of ¥1,549 per share), the adjustment created a massive valuation gap.

Critically, this is a non-cash loss with no impact on Renault’s liquidity, dividends, or 2024 financial guidance. As analysts at Oddo noted, it actually removes future earnings volatility from Nissan’s operational swings.

Nissan’s Downward Spiral

Nissan’s decline made this reckoning inevitable:

  • Financial Crisis: Nissan reported a $4.5 billion net loss for FY2024–25 and holds ¥800 billion ($5.6 billion) in debt maturing next year. The company recently asked suppliers to delay payments to conserve cash.
  • Strategic Stagnation: Once an EV pioneer, Nissan lost its edge with an aging lineup and failed tie-up talks with Honda. Its market cap has collapsed to less than a quarter of its mid-2000s peak.
  • Leadership Turmoil: New CEO Ivan Espinosa faces skepticism after Nissan’s annual meeting, where shareholders questioned his turnaround plan’s viability.

Unpacking the Alliance’s Rocky Legacy

Renault rescued Nissan from bankruptcy in 1999, acquiring its controlling stake—a lopsided power dynamic that bred decades of resentment. The partnership never achieved its intended merger, and tensions peaked with the 2018 ouster of chairman Carlos Ghosn. Recent developments signal a conscious uncoupling:

  • Cross-shareholdings were reduced from 15% to 10% in 2023.
  • Joint projects now focus narrowly on specific manufacturing initiatives (e.g., the electric Nissan Micra based on Renault’s R5 platform) rather than full integration.
  • Renault has received €8 billion in Nissan dividends since 1999—highlighting the stake’s historical value.

Market Reactions and Strategic Implications

Renault’s shares rose 0.6% after the announcement, reflecting investor approval of improved financial transparency. Morningstar called it “a clearer reflection of Renault’s underlying profitability”. Yet challenges remain: Renault lacks a permanent CEO after Luca de Meo’s departure to Kering, and its stock is down 18% year-to-date.

For Nissan, the accounting shift is a grim milestone. As Renault effectively acknowledges Nissan’s standalone market value, it underscores the Japanese automaker’s loss of strategic relevance to its former savior.

The Road Ahead: Pragmatism Over Partnership

Both companies insist operational collaboration continues. Joint projects like software-defined vehicles and EV platforms in Europe, India, and Latin America remain active. Renault’s statement emphasized a “pragmatic and business-oriented approach” focused on “maximizing synergies” without forced integration.

But the alliance’s golden age is over. As accounting mirrors reality, Renault and Nissan now operate as wary allies—bound by legacy investments and tactical projects, but no longer by shared ambition.


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