PARIS (Reuters) -French car maker Renault is holding an investor day for its electric vehicle unit Ampere, which was carved out from Renault’s other operations on Nov. 1 and is set for a market listing next year.
Having pioneered the market for first-generation electric vehicles with its long-time ally Nissan in the early 2010s, Renault has recently fallen behind EV-only makers such as Tesla and its Chinese rivals as global competition for greener vehicles has picked up.
Here’s what you need to know about Ampere, a major plank of Renault’s turnaround strategy.
Renault on Wednesday said Ampere targeted at least 10 billion euros ($10.8 billion) in revenues in 2025 from around 2.8 billion euros in 2023. Revenues should reach at least 25 billion euros in 2031.
It expects an annual revenue increase of 30% through 2030 – compared with the less than 8% for the whole of Renault over the last quarter.
The unit gas a product line-up of seven vehicles by 2031: Megane E-Tech, Scenic E-Tech, Renault 5, Renault 4, Legend and two additional vehicles which Renault has yet to name.
It targets a profit and free cash flow break-even in 2025, with an operating margin of at least 10% in 2030 and beyond, and cash conversion of above 80% in 2031.
CUTTING COSTS Ampere says it employs over 11,000 people, a third of whom are engineers, and aims to become a European leader in the EV market both for technology and the competitiveness of its cars.
To ward off increased competition from cheaper Chinese EVs, Ampere aims to reduce by 40% the cost of manufacturing cars through 2027 and beyond by offering fewer models and cutting costs at the conception and production stage.
It also aims to reduce the time needed to produce an EV to less than 10 hours.
IPO PLANS A stock market listing of Ampere, initially expected for this year, but now slated for the first half of 2024, aims to extract more value from the business by giving investors more visibility on its operations and separating it from the combustion engine business, called Horse.
Renault CEO Luca de Meo has said Ampere could achieve a valuation of 8 to 10 billion euros, but UBS analysts give Ampere a value of just 3-4 billion euros and others have questioned the rationale for carving out and listing the business through an IPO.
INVESTMENT PARTNERS Nissan has committed to invest up to 600 million euros in Ampere, and Mitsubishi, also a partner in the Franco-Japanese alliance, up to 200 million euros. Renault said on Wednesday those investments would take place even if the company does not proceed with an IPO. Chip-maker Qualcomm is also expected to invest in Ampere. On top of those deals, Renault aims to float around 20% of Ampere’s capital, and will keep owning between 60% and 70% of the business.
ONE MILLION CARS BY 2031 Ampere has three factories in northern France. It will purchase batteries for its cars from Chinese-Japanese maker AESC Envision and French start-up Verkor. Both have gigafactories near Ampere’s plants. Ampere targets sales of 300,000 EVs in 2025 from 45,000 in 2023. Sales should one million cars in 2031. Ampere plans to offer six EV models by 2030, including its existing Megane E-Tech, and a relaunched version of Renault’s former mini hatchback, the R5, due to be launched next year. With its current line-up, Renault said it was the third biggest seller of EVs in Europe in 2022, behind Tesla and Volkswagen.
(Reporting by Gilles Guillaume, writing by Silvia Aloisi, editing by Miral Fahmy)