Renault H1 Report to Show $11.2 Billion Loss Linked to Nissan Accounting Change

An automobile company recently announced a major financial setback, a $11.2 billion loss during the first half of 2025. That’s not from selling fewer cars or rising costs. Instead, it stems from a change in how Renault accounts for its investment in Nissan.

Yes, it’s all about accounting. But don’t tune out just yet, this change could reshape how we see Renault’s finances going forward.

For years, Renault and Nissan worked closely as part of a global alliance. Renault owns a big chunk of Nissan, so it always included Nissan’s profits in its reports. Now, that’s changed. And the result is a paper loss that shocked investors and raised big questions.

So what happened? Why did Renault decide to do this now? And what does it mean for the future of the Renault-Nissan partnership?

Context & Alliance Background

Both companies formed a strategic alliance over 20 years ago. Renault owns 35.7% of Nissan, 17.05% directly and the rest via a trust. This made Renault’s financials closely tied to Nissan’s.

Stock markets once cheered on Nissan’s success as Renault’s own. But recently, Nissan stumbled. Its sales dropped, and it reported big operational losses. Renault now wants a cleaner separation from Nissan’s turbulence.

The Accounting Shift Explained

Previously, Renault included Nissan’s profits or losses in its net income. That meant Nissan’s swings hit Renault’s bottom line.

Now, Renault says any gains or losses from Nissan will go straight into equity. That keeps these swings off the income statement, isolating them from their day-to-day operations.

In simple terms, they want to declare that we still own Nissan shares, but we won’t act like Nissan’s wins or losses are ours. Instead, they affect our equity value, and that doesn’t scare shareholders as much.

The €9.5 Billion Loss Breakdown

So, how did Renault get to €9.5 billion? It’s a big non-cash adjustment. Nissan’s stock price dropped during recent struggles. Under the equity method, that drop slashed the value of their holding, triggering a hefty loss.

Importantly, nothing was spent. No cash left the company. This is all on paper.

Operational vs. Financial Impact

Here’s the key: This loss doesn’t hit cash flow. They still have the same cash in the bank. They can still pay dividends and fund projects like before.

Operating partners, suppliers, and investors should focus on Renault’s core business, they are separate from this accounting event.

Broader Strategic & Market Implications

This accounting change signals a loosening bond between them.

Nissan, meanwhile, is slicing costs, selling assets, and cutting its stake in Renault to fuel development toward autonomy and cash preservation.

Share markets responded swiftly. Renault’s stock fell on this loss. Nissan’s share value shrank also hit sentiment. With system changes underway, investors are now parsing what’s routine and what’s strategic repositioning.

Leadership & Governance Impacts

Renault’s CEO, Luca de Meo, is leaving mid‑July to become CEO of luxury group Kering.

De Meo revived Renault, nearly doubling its share price since 2020 through cost cuts and the “Renaulution” plan. His exit is a big shift.

Renault bosses say the change won’t derail their plans. Yet, such leadership shifts often bring fresh direction and some uncertainty.

What’s Next for Both?

Renault will release full H1 earnings on July 31. We’ll finally see core results separate from this paper loss.

Then we’ll watch for moves in the alliance. Will Renault reduce its Nissan stake further? Will it actually follow through with its stake sale plans? And who takes over at Renault?

Final Words

Here’s what matters:

• The €9.5 billion loss is a non-cash, paper adjustment tied to Nissan stock value.
• It doesn’t hurt Renault’s cash or dividend capacity.
• But it changes how Renault presents its health clearly now, also signaling a deeper shift.
• Combined with De Meo’s departure, Renault is at a strategic crossroads.
  

As we prepare for the full report in late July, eyes will be on how it separates from Nissan and who leads the next phase of its journey.

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This content is for informational purposes only and not financial advice. Always conduct your research.