Renault books 9.5-bn-euro loss on Nissan shares

French automotive giant Renault announced on Tuesday a significant loss of 9.5 billion euros ($11.2 billion), stemming from a change in how it accounts for its substantial stake in struggling Japanese partner Nissan. This move reflects a broader industry push towards aligning equity stake valuations with market realities.

The relationship between Renault and Nissan dates back to 1999 when Renault spearheaded a rescue of the Japanese automaker. Since then, both companies have maintained reciprocal shareholdings in a partnership that, despite its longevity, never culminated in a full merger.

Nissan, currently grappling with considerable debt, has faced a challenging period, reporting a net loss of $4.5 billion for the financial year ending March 2025. The company has also unveiled plans to reduce its global workforce by 15 percent. Its share price has plummeted nearly 40 percent over the past year, now trading at less than a quarter of its peak value during the height of the alliance in the 2000s.

Renault’s accounting adjustment, effective June 30, 2025, reclassifies its Nissan stake as a financial investment. This change, according to a company statement, “will result in the recognition of a loss estimated at 9.5 billion euros.” Renault clarified that this accounting change will have no impact on its cash flow or its dividend payments to shareholders. However, it signifies that future fluctuations in Nissan’s share price will directly affect Renault’s equity value, rather than its operating results.

Historically, dividends received from Nissan contributed to Renault’s earnings, with the French automaker noting it has received eight billion euros in dividends from Nissan since the alliance’s inception.

Renault had amassed a nearly 36 percent stake in Nissan, a holding that previously sparked tensions between French and Japanese interests. A recent agreement aims to reduce their official cross-shareholding to 15 percent.

Despite the significant accounting loss, Renault affirmed that this change will not impede ongoing collaborative projects with Nissan, including the development of a new Nissan Micra subcompact based on the electric Renault 5 platform.