Renault scraps listing of 'Tesla rival' amid slump in EV demand

Car giant Renault has scrapped plans to list its electric vehicle business on the stock market amid slowing demand and a lack of investor appetite.

The French manufacturer on Monday announced it was cancelling a proposed float of the EV unit, Ampere, in the first half of this year, with bosses not giving any revised timings for when the deal could reemerge. 

Bosses at the company blamed “current equity market conditions”, while also saying that Renault Group’s ability to generate cash had proved better than expected. 

Luca de Meo, Renault’s chief executive, had previously described Ampere as Europe’s answer to Tesla while suggesting its success was crucial to the wider group’s turnaround. 

However, on Monday he said: “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.” 

It comes after European and UK sales of electric vehicles slowed last year, as cash-strapped consumers baulked at high prices and unevenly-spread charging networks. 

Separately on Monday, London-listed car dealer Inchcape confirmed it was exploring a sale of its UK network of 70 sites.

The market for initial public offerings plummeted last year, as cautious dealmakers kept their powder dry amid rising interest rates and turbulent geopolitics.

According to EY, the volume of listings globally fell by 8pc compared to 2022, with proceeds down by 33pc.

Just $123bn was raised overall, the lowest annual figure for the past five years. 

EY said sentiment appeared to improve towards the end of 2023 but Renault’s decision will be seen as a fresh note of gloom across the overall market. 

Mr de Meo had previously suggested Ampere could be worth up to €10bn (£8.5bn), with the listing seen as a strategic move to separate Renault’s legacy car business from the faster-growing EV division. 

The company did not blame lacklustre demand but said sales have cooled, with car makers slowing down their rollouts.

Last week, Tesla warned of a sales slowdown this year, adding that investors should expect “notably” lower growth as higher borrowing rates put consumers off car finance deals.

Separate data from the Society of Motor Manufacturers and Traders (SMMT) showed the UK market share of EVs went into reverse last year.

Some car makers, including Tesla, have resorted to price cuts in a bid to buoy demand, while government subsidies in countries such as the US are also cutting the cost for consumers.

However, the SMMT is urging Jeremy Hunt, the Chancellor, to jump-start demand by slashing VAT on electric car purchases for three years in his next Budget, due on March 6. 

At the same time, manufacturers are being forced to ramp up the proportion of pure EVs they sell under the so-called zero-emission vehicle (ZEV) mandate. 

Car makers will face fines if they fail to hit the targets which take effect from this year. The figure for 2024 is 22pc, rising to 28pc in 2025, 52pc in 2028 and 80pc by 2030.