Renault said on Monday it will develop a military vehicle in partnership with defence technology company Thales, expanding its projects to support European rearmament efforts.The project draws on Renault’s industrial expertise and Thales’s secure communications technologies to produce a multi-mission vehicle quickly and at optimal cost, the carmaker said.Russia’s invasion of Ukraine and a shift in US foreign policy under President Donald Trump have driven a step up in defence investment by European countries.Several European defence firms are looking to the auto sector for additional production capacity to ramp up output as they win a surge in orders.“With defence revenue capped and procurement visibility constrained, we continue to think the strategy should be viewed primarily as optional upside and diversification rather than a short-term earnings driver,” Michael Foundoukidis from ODDO BHF said in a note.The analyst said he expects a modest short-term financial impact from the deal but said it was not driving Renault’s shares.Renault is up like other car names, not because of the partnership but thanks to the prospect of a deal between the US and Iran— Michael Foundoukidis“Renault is up like other car names, not because of the partnership but thanks to the prospect of a deal between the US and Iran,” he told Reuters.Renault has previously said it responded to requests by France’s defence ministry to contribute to military projects, including a plan to produce aerial drones with drone manufacturer Turgis Gaillard.A prototype of the new vehicle, dubbed 4 Troop, will be presented at the Eurosatory defence fair opening near Paris on Monday.Renault said the hybrid 4x4 can operate on all terrains, support reconnaissance, surveillance, troop co-ordination and drone deployment, and power field equipment through its vehicle-to-load function.The first demonstrator of its drone under development with Turgis Gaillard is set to fly before the end of this year, Renault CEO Francois Provost told Reuters last week.“That’s also the advantage of the automotive industry: we don’t take 30 years to do something, we’ll do it in 12 months,” he said in an interview.Renault is also working with Belgian military equipment company John Cockerill on projects in early stages.Reuters