Renault chief urges European investors to back its EV IPO

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The boss of Renault has urged European investors to back its new electric vehicle arm set to float next year, as he set out plans to more than double sales by 2031, and claw market share from rivals including Tesla. 

Chief executive Luca de Meo said the French carmaker had “many options,” including financing its EV offensive itself, as he laid out the strategy and ambitions of the new “Ampere” unit to win over sceptical investors ahead of a planned IPO in the first half of 2024. 

Raising cash from investors would allow it to “accelerate” EV plans, which include seven new models that it believes will increase Renault’s share of the overall European market. 

“Tesla would not be there without the support of the US financial market. Many Chinese [carmakers] would not be there without the support of the government or the financial markets.

“My job is to defend the European industry and make sure the European industry is going to be competitive globally. If you don’t like that, go to China or the US.”

He added that the new business hopes to attract a new class of investors on the back of its green credentials. 

“Maybe a lot of people that would never put money in a traditional [carmaker] would be interested in the Ampere project,” he said.

The French carmaker outlined a series of new targets for the division on Wednesday, including operating margins of more than 10 per cent from 2030.

De Meo also set out how new EV models — including the upcoming Renault 5, and a new small city car called the Legend to be unveiled later on Wednesday — could grow the carmaker’s share of the EV market to as high as 14 per cent, far above the brand’s traditional position of around 10 per cent of European auto sales.

It also plans to slash production costs, including those linked to batteries, in order to bring down the price of its electric vehicles to match cheaper combustion engine vehicles.

In September, De Meo told the FT that the Ampere business could be worth “eight, nine, ten” billion euros, though on Wednesday he declined to comment on possible valuations. Last summer the company pushed back IPO plans until the first half of 2024.

Speaking ahead of investor presentations on Wednesday, De Meo shrugged off concerns that the European EV market was slowing. “Everyone is saying that the scenario is pretty depressing, but the future belongs to the optimist,” he said. 

Some analysts are still questioning the need to float Ampere, arguing that Renault had other ways to raise funds.

“We have reservations about dilution of existing Renault shareholders considering shareholder friendlier alternatives,” Philippe Houchois, analyst at Jefferies, said in a note, citing the “internal funding using the dormant Nissan stake” as one option.

As part of a reset of Renault’s strained alliance with partner Nissan, the French group trimmed its 43 per cent stake in the Japanese carmaker to 15 per cent this year, with the rest of the shares placed in a trust.