“Revolution” at Renault, which will separate and list its electric cars on the stock exchange

LFrench carmaker Renault has emerged from a risky period for the auto industry and is looking for partners: it will take its electric cars to the stock market, collaborate with China’s Geely for its traditional engines, and accelerate with the premium Alpine brand.

The group will launch a new subsidiary, Ampere, which will bring together 10,000 workers in France to produce one million electric cars under the Renault brand by 2031.

In particular, this subsidiary, which produces the new Renault 5, wants to be as bright as Tesla or China’s BYD, whose stock prices are enviable. Ampere is targeting annual growth of more than 30% over the next eight years.

America’s Ford also announced the creation of an electric subsidiary called the Model E, while Germany’s Volkswagen floated its Porsche brand to finance electrification.

So Renault wants to accelerate again in the field of electricity, where it used to be a pioneer.

But it is also betting on the sustainability of heat engines outside the European Union, the most ambitious climate zone and the only new cars allowed on sale in 2035 to emit no greenhouse gases.

This new part of its strategic plan, called Revolution, should bring the group to an operating margin of more than 8% in 2025, compared to 4.7% in the first half of 2022. The group plans to generate more than 5 billion euros in revenue. in free financial flows this year.

If Renault was looking to “push the metals” under Carlos Ghosn, it would have to be a “countercyclical company” and thus take advantage of uncertainties in the car market, Renault CEO Luca de Meo launched.

Lozange will “play the game with as little investment as possible”, Mr De Meo stressed. The group favors partnerships: already in batteries with Envision and Verkor and soon in electricity on the stock exchange, but also in the utility sector, in premium with the Alpine brand and especially in heat engines with Geely.

Financing of electricity

Therefore, Renault will join forces 50/50 with the Chinese giant Geely, which already owns Volvo Cars and Lotus, and will produce engines, gearboxes and hybridization systems for thermal cars (gasoline and diesel) in a new subsidiary called “Horse”. and hybrids.

This Franco-Chinese team will have 19,000 employees with 17 factories and five joint R&D centers in Europe (Spain, Romania and Sweden), China and South America.

The new facility, called “Power” (power), will combine all of Losange’s heat and hybrid activities (Horse, gasoline and diesel from the Renault brand, utilities and Dacia).

This new push into conventional engines should also protect Renault “from any threat that could affect the development of electricity in raw materials,” Renault president Jean-Dominique Senard explained.

The group plans to list Ampere on the Paris Stock Exchange “in the second half of 2023 at the earliest” and finance the expensive electric switch thanks to investors attracted by high rates of return. As Ampere is the “future of the Renault brand” while retaining a “strong majority” in the subsidiary, the group’s CFO Thierry Pieton stressed.

US chipmaker Qualcomm, a Renault supplier, has already decided to buy a small stake in Ampere. Whether the venture will measure up to Renault’s expectations remains to be seen.

What about Nissan?

The group’s share stabilized at 31 euros at the opening of the Paris Stock Exchange at around 11 am.

Because Losange’s core partnership is still in doubt: Renault, in which the French state and Nissan each own 15%, have yet to specify the stake their Japanese partner will take in the new electric subsidiary.

This “revolution” actually comes before the overhaul of the Renault-Nissan-Mitsubishi alliance, the reduction of Renault’s stake in Nissan capital, which “should be clarified in the coming weeks”, Mr De Meo. .

Renault will also expand its world-renowned Alpine brand through its Formula 1 team and relaunch it in luxury cars. The brand will be open to investors and could expand, particularly in North America or China.

11/08/2022 15:39:19 – Paris (AFP) – © 2022 AFP

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