Renault-Nissan CEO Carlos Ghosn and Daimler AG chairman Dieter Zetsche sign the agreement

Not much more than a week ago, Daimler and Renault-Nissan announced an alliance that was reported to possibly lead to more small cars from the two brands. We have visions of Twingos and Smarts sitting side-by-side with a Nissan sibling not far behind. As alliances go, there could be no greater pairing, right?

Everything was going as planned with paperwork signed and reports pouring in about the bright future for the companies until one question was discussed which probably went down something like this: What batteries should we put in the Smart ED and the Twingo ZE? Should we go with Renault-Nissan ones or the Daimler-developed units? Maybe different batteries can go in each vehicle. Nah, our batteries are better so let's go with that. What do you mean yours are better?

Stuttgart, we've got a problem! As it turns out, both Daimler and Renault-Nissan have independently vowed to become world leaders in battery technology. When you take two companies that believe they are the best in the biz and ask them to select one battery, you are really asking for one company to admit to failure, right? The battery disagreement began at the signing, with Nissan chief executive officer Carlos Ghosn and Daimler CEO Dieter Zetsche each talking a bit of smack.

Ghosn opened with, "We are obviously going to do everything in order for our battery to be considered as the best," adding that Daimler is "not obliged" to use Nissan batteries but "doubts" that they could find anything better out there. Zetsche responded that Ghosn may be right and a better battery may not exist outside of Daimler, but one could likely be found "inside" the company. He added, "We have the production know how and the financial muscle to secure a long-term competitive position."

Compromise is key to alliances, but batteries are an element that both companies hold in high regard. This early disagreement seems far from minor and it will be interesting to see how it works out.

[Source: Bloomberg via Green Car Advisor]

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