Renault cancels planned IPO of EV unit Ampere

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Renault has cancelled plans to list shares in its new electric vehicle and software business, a pivotal part of chief executive Luca de Meo’s turnaround plans for the French carmaker.

The company had planned to hold an initial public offering of its new “Ampere” business, which combined its EV skills and software into a new unit. De Meo had described the unit as a European rival to “Tesla and the Chinese”, and told the Financial Times last year it should be worth “up to €10bn”.

But on Monday, Renault said that “market conditions”, and rising profitability of the wider company, meant it would cancel the plans to float shares.

On Monday evening Renault said that “the current equity market conditions are not met to optimally pursue the IPO process”, and that it will cancel the planned listing.

The company has stressed the unit is “self-funding”, and that it did not need the IPO to raise capital for the wider group. Renault’s own cash generation had been stronger than expected, contributing to the decision, it said.

Doubts about the flotation had begun to grow in recent months amid a broader slowdown in EV sales.

People close to the carmaker said that the point of the IPO and Ampere carve-out was also to try to change the company from within, and stimulate its culture so that it would be more focused on EVs, a move that would still stand to a degree given the business has been separated.

But the cancelled flotation is still a big setback for de Meo. He has turned Renault around financially since arriving in mid-2020 but more recently had tied his reset strategy to Ampere going public and had pushed for a punchy valuation, which many analysts had said was too ambitious.

Last year de Meo criticised European investors for raising too many questions about the business model, comparing the situation with US investors who buy into unprofitable EV start-ups.

On Monday, de Meo said cancelling the listing was “a pragmatic decision” but that Ampere remained “an agile and competitive entity”.

He added: “By setting up a 100 per cent focused EV and software business, we built in record time an agile and competitive entity. We have the start-up mindset, which allows us to constantly innovate. This is exactly what will make Ampere successful in this new challenging environment.”