The Renault group announced on Monday “cancel” the IPO of its brand new electric car subsidiary Ampere, which was planned for 2024 (AFP / Lou BENOIST)
Announced since 2022 and planned for the spring, the IPO of Renault’s subsidiary dedicated to electric cars, Ampere, has finally been canceled, the French automobile group announced on Monday.
This is a major strategic turnaround for Renault and a new warning for the electric sector, which, beyond Tesla, is struggling to convince investors, at a time when IPOs have been slowing down since almost two years.
And a setback for the group’s boss, Luca de Meo, who was also appointed CEO of the subsidiary last June and who made it his spearhead.
In its press release, Renault justifies the decision by “current market conditions” which “are not met to continue the IPO process and best serve the interests of Renault Group, its shareholders and Ampere”.
But above all, Renault does not need new money to finance the development of Ampère, the group’s boss, Luca de Meo, stressed to journalists.
“We have the money to move forward with the project as is” and absorb the losses of Ampère, which is still aiming for financial balance in 2025.
“The results expected for 2023 confirm the group’s ability to generate cash sustainably to finance its future,” specifies Renault.
– Weak market in the United States –
The manufacturer, which is recovering after difficult years, launched this subsidiary in November 2023 which brings together its electrical and software activities in France, with a total of 11,000 employees.
Its valuation had been estimated between eight and ten billion euros, as much as Renault Group.
The IPO should make it possible to receive new money to accelerate the electric shift, and “give dividends to shareholders and the group more quickly”, Mr. de Meo underlined at the end of 2023.
But he had to convince the financial markets, where historic automobile manufacturers pale in comparison to their new electric competitors, like Tesla.
The decision also highlights questions about the electric car market.
Because if 2023 was a record year for electric vehicles in France and motorization is still recording strong increases in Europe, sales are less dynamic in the United States.
In addition to prices higher than those of combustion engine vehicles, customers seem put off by the inadequacy of the charging infrastructure and by a limited autonomy, unlike combustion.
“We made the decision because the cash was available,” detailed Mr. de Meo about the cancellation. He spoke of a “not ideal” context and a poorly oriented electric market.
Renault’s decision should therefore resonate as far as the United States, where Ford has announced the creation of an electric subsidiary, without specifying an IPO plan at this stage.
– Forecasts unchanged –
In an electric car market which has exploded in recent years, the Renault subsidiary plans to sell around 300,000 vehicles in 2025 and a million in 2031, or half of what Renault sold worldwide in 2022.
Ampere is targeting an ambitious turnover of 10 billion euros from 2025, compared to 46 billion for the Renault group in 2022, and an annual growth rate of more than 30% between 2023 and 2031.
“Over the last half-years, Renault Group has significantly improved its performance to reach levels exceeding its initial expectations,” underlined Renault.
Thus, the decision to short-circuit the financial markets “has no impact on the financial prospects of Renault Group, nor on its capital allocation strategy”, assures the group’s management.
And it does not call into question the principle of an investment by Nissan and Mitsubishi in Ampère, announced at 600 million and 200 million euros respectively.
The contract signed with these two partners allows for investment in all cases and “this is something that we must discuss”, detailed financial director Thierry Piéton.
However, the investment by electronic chip giant Qualcomm “depended” on the IPO and “we will have to discuss what that means, if they want to participate in another way,” he said.