Renault is setting its sights on a remarkable revenue surge for its electric vehicle unit, Ampere, with projections exceeding 10 billion euros ($10.8 billion) by 2025. The automaker’s strategic move aims to instill confidence in investors ahead of Ampere’s planned market listing next year.
While facing challenges such as a subdued demand for electric vehicles, volatile markets, and intensified competition from China, Renault remains steadfast in its decision to proceed with an initial public offering (IPO) for Ampere, scheduled for next spring after a previous delay. The company assures skeptical investors that it possesses sufficient funds to fuel Ampere’s growth without resorting to an IPO. However, the IPO remains the preferred choice as it enables accelerated development and earlier dividend payments through raised funds.
Renault has also unveiled plans to introduce a smaller and more affordable electric vehicle model. The aim is to stay competitive in the market and respond to increasing competition from Tesla and more affordable Chinese models. By reducing production costs, Renault hopes to democratize the electric vehicle market and offer the new model, called Twingo Legend, at a price below 20,000 euros.
While some analysts view the separation of Ampere as a logical move, describing it as a leaner and more modern business compared to Renault’s existing operations, concerns persist about Ampere’s ability to achieve Renault’s ambitious growth targets. UBS analysts have expressed reservations about Renault’s valuation for Ampere, estimating it at 3 billion-4 billion euros. They emphasize the uncertainty in financial performance until 2025-2030.
Despite the challenges, Renault CEO Luca de Meo remains confident in Ampere’s potential. He clarifies that the IPO may be abandoned if the valuation proves unsatisfactory but insists that Renault is a prudent company making careful decisions.
Q: What are Renault’s revenue projections for Ampere?
A: Renault anticipates Ampere’s revenue to exceed 10 billion euros by 2025 and reach 25 billion euros by 2031.
Q: When is Ampere’s initial public offering (IPO) planned?
A: Ampere’s IPO is scheduled for next spring.
Q: What is the goal of introducing a smaller and more affordable electric vehicle model?
A: Renault aims to stay competitive and respond to the rising competition from Tesla and more affordable Chinese models.
Q: Are there concerns about Ampere’s ability to achieve Renault’s growth targets?
A: Yes, some analysts have expressed reservations about Ampere’s ability to achieve Renault’s ambitious growth targets.
Q: How does Renault plan to reduce production costs?
A: Renault plans to reduce production costs to democratize the electric vehicle market and offer the new model, Twingo Legend, at a price below 20,000 euros.