Renault is establishing aggressive financial targets for Ampere, its electric vehicle (EV) and software subsidiary, in the face of difficult market conditions and competition pressure. The business declared today that its goal is to turn a profit of more than €10 billion ($10.9 billion) by 2025. This news is being made as Renault gets ready to list the Ampere subsidiary for an initial public offering (IPO) in April or May of 2024, with a valuation goal of between €8 billion and €10 billion.
All about Ampere, Renault’s EV division ambitions
The CEO of Renault, Luca de Meo, is making a concerted effort to increase investor trust in Ampere, especially in view of recent worries about slowing demand for EVs and increased competition from Chinese producers. The corporation is unwavering in its objectives despite these obstacles; however, it has hinted that it would reconsider the IPO if valuations dropped below €7 billion.
Additionally, the business is getting ready to launch a new, reasonably priced electric car to take against less expensive Chinese competitors. This is a critical move because next year will see the arrival of Renault’s replacement EV models, the Scenic and R5, replacing some of the company’s current models, like the Zoe and Twingo. Sales data for the electric Megane, however, indicates that it has only sold 14,220 units, trailing behind Tesla’s Model Y. This represents a 2.5% growth in the first half of the year despite a 5% decline in sales in Europe, resulting in barely 1% of the passenger car market share.
Renault has moved its 28.4% ownership in Nissan into a special fund ahead of Ampere’s first public offering (IPO), instead of obtaining direct funding from the public markets. Additionally, Ampere may receive an injection of up to €800 million from partners Nissan and Mitsubishi Motors through financial commitments. The tech behemoth Qualcomm is also thinking about funding the project.
The strategic updates announced today are a part of de Meo’s larger plans to restructure Renault, which include dividing the company’s businesses related to internal combustion engines from those related to battery electric vehicles (BEVs). The CEO is anticipated to make his case for the IPO by stressing the advantages of this split and underlining Ampere’s potential in the quickly changing EV market.
