Renault sets 10 billion euro sales goal for EV arm in IPO pitch
RENAULT is targeting more than 10 billion euros (S$14.6 billion) of revenue by 2025 for its electric-vehicle (EV) and software arm Ampere, which the French carmaker aims to list in an initial public offering (IPO) in April or May next year.
Ampere also plans to introduce Legend, a compact, Europe-made EV that will sell for less than 20,000 euros, the company said on Wednesday (Nov 15), as the battle for more affordable cars heats up in a region where consumers have been hit by a cost-of-living crisis.
Renault is holding a capital markets day on Wednesday for Ampere, where the company will seek to win over investors in what’s a difficult market for listing alongside a bruising price war in the EV market.
Renault chief executive officer Luca de Meo is pitching Ampere as a European response to competition from US rival Tesla and Chinese EV manufacturers. The 56-year-old executive is targeting an ambitious valuation of eight billion to 10 billion euros for Ampere, despite an unwelcoming market for IPOs and worries that selling a stake will be excessively dilutive to existing shareholders.
Ampere, which started operating separately from its parent on Nov 1, will have sales of about 2.8 billion euros this year, the company said.
In an interview with Bloomberg last week, de Meo said that he had no intention of pricing the Ampere IPO at a discount, and that the listing would be “only one piece” of a longer-term project.
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Renault recently loosened its ties with Nissan Motor, and has the option of selling the 28.4 per cent stake in its long-time partner that it recently transferred into a fund to finance Ampere’s EV plans rather than hold an IPO.
Renault reiterated on Wednesday that it’s aiming for an Ampere IPO in the first half of next year. Nissan and Mitsubishi Motors will invest a total of as much as 800 million euros in the entity, and Qualcomm is also considering investing.
The Qualcomm investment “is being finalised” and should be unveiled “very quickly,” chief financial officer Thierry Pieton said during a media call on Wednesday.
De Meo wants to proceed with an IPO to attract new investors in Ampere. He may shelve the listing below a valuation of roughly eight billion euros, Bloomberg reported this week, citing people familiar with the situation.
Renault will “always be open to exploring alternative options” for Ampere if the IPO does not go through but the listing remains the main plan, Pieton said when asked if a spinoff also could be on the table.
Mitsubishi and Nissan would still invest in Ampere but “in a different form” if the IPO is shelved, Pieton added.
“They want to be part of this story,” Pieton explained. “Ampere is unique, it’s a real company that already produces cars, it’s not a Powerpoint. There’s no other pure EV player in Europe today.” BLOOMBERG
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