Renault Group, the European automaker, has recently taken a significant decision that marks a new chapter in its corporate strategy. The auto giant has decided to reverse its earlier plan to conduct an Initial Public Offering (IPO) for its exclusive Electric Vehicle (EV) and software subsidiary, Ampere. This surprising move is complemented by a affirmation of the Group’s commitment to its EV and software development strategy.
The Inception of Ampere
Established by Renault Group, Ampere has emerged as the only business entity in Europe focusing exclusively on EV and software. The key objective behind the creation of Ampere has been to democratise EV adoption across Europe faster than other pure-play EV companies.
The strategic approach of Renault Group entailed structuring Ampere as an independent business entity, complete with a dedicated team specialising in EV and software. This design was intended to enhance competitiveness, agility, and innovation. As of 1st November 2023, Ampere operates autonomously, and Renault Group assesses this structure’s operational and industrial advantages daily.
The Abandoned IPO Plan
In 2022, the Renault Group revealed its intention to undertake an IPO for Ampere, with a projected timeline for the first half of 2024, contingent upon market conditions. However, Renault Group has now determined that the present equity market conditions do not provide an optimal environment to continue with the IPO process. This decision is believed to be in the best interest of Renault Group, its shareholders, and Ampere.
Financial Self-sufficiency and Cash Flow Generation
Renault Group’s strategic plan, termed as “Renaulution”, is self-funded. The financial results of 2023, due for release, are expected to validate the Group’s capability to generate sustainable cash flow to finance its future, including the development of Ampere. Over the recent semesters, Renault Group has significantly enhanced its performance, exceeding initial expectations. This improvement has provided the Group with greater flexibility and autonomy.
Owing to the current equity market conditions and stronger cash generation, Renault Group resolved to abort the Ampere IPO process.
Commitment to Execute Ampere’s Strategy
The entire team at Ampere is fully committed to implementing its strategy and establishing its track record. The primary focuses include:
- A well-defined roadmap to drastically reduce EV cost by 40% in one generation, which will gradually enhance vehicle price positioning.
- A robust tech plan to differentiate with software and Artificial Intelligence (AI) solutions such as OpenR Link, Reno Avatar, Software-Defined-Vehicle etc.
- Major forthcoming launches including Scenic, Renault 5, Renault 4, Twingo, and two additional cars.
- The scaling-up of the most compact and efficient industrial EV ecosystem in Europe, which has already received investments.
The Renault Group has pledged to continue funding Ampere’s development until it achieves breakeven in 2025. All targets announced during Ampere Capital Markets Day remain unchanged. This decision does not impact the Renault Group’s financial guidance or its capital allocation strategy.
Quotes from the CEO
“I’m extremely proud of our teams who created in less than 2 years the best answer to top global players’ competition with Ampere. By setting up a 100% focused EV and software business, we built an agile and competitive entity in record time. 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. Today, we took a pragmatic decision. We are all focused on executing our strategy and building our track record to create value for all our stakeholders.” – Luca de Meo, CEO Renault Group & CEO Ampere