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 combines its EV skills and software into a new unit. The aborted flotation is the latest casualty of slowing growth in EV sales worldwide, as mainstream car buyers balk at higher prices of battery-powered cars.

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 the rising profitability of the wider company meant it would cancel the plans to float shares.

De Meo added that the Europe-wide slowdown in EV growth was “one of the elements” behind the decision, but stressed that the electric market was still going to be “dominant” in Europe because of the region’s decarbonisation regulations. 

“EV is a train that has already left the station. Ampere will be one of the drivers of Renault to be one of the champions of decarbonisation,” he said. 

But the decision may mean that alliance partners Nissan and Mitsubishi may now not invest in the unit, finance chief Thierry Piéton said. Both Japanese carmakers still have the option to invest, but “whether they come in or not is something we need to discuss”, Piéton said on Monday evening.

The company has stressed the unit is “self-funding” and that it does 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 the growth of 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.

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But the cancelled listing 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 that many analysts had said was too ambitious.

De Meo said on Monday the listing was a “side dish” compared with the wider turnaround of the company, and that he did not believe the decision damaged his credibility. 

Last year he had 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”.