French automaker Renault presented a sweeping reorganization on Tuesday in a bid to lure investors into electric, like other automakers needing to fund billions of euros for the electric shift it wants in the next decade. by Europe.
Its new subsidiary called “Ampere” – without accent – will bring together 10,000 employees in France to produce one million electric vehicles under the Renault brand by 2031, the group announced during a day dedicated to investors in Paris.
Ampere will notably produce the new Renault 5 and Renault 4 in Hauts-de-France.
This subsidiary wants to be as sparkling as Tesla: it aims for more than 30% annual growth in the next eight years and financial balance in 2025.
The American Ford has also announced the creation of an electric subsidiary, “Model E”, while the German Volkswagen has launched its Porsche brand on the stock market to finance its electrification.
But Renault wants to play both on an electric future and on the persistence of thermal engines outside the European Union, the most ambitious climate zone and where the only new cars authorized for sale in 2035 will have to produce no emissions of greenhouse gas.
Financing electricity
Renault will therefore join 50/50 with the Chinese giant Geely, already owner of Volvo Cars, in a new subsidiary called “Horse”, which will produce engines, gearboxes and hybridization systems for thermal cars. (petrol and diesel) and hybrids.
This Franco-Chinese team will have 19,000 employees in Europe (Spain, Romania and Sweden), China and South America, with 17 factories and five research and development centers. Its turnover, estimated at more than 15 billion euros, should grow by 4% until 2027.
A new entity, “Power” (power) will bring together all the thermal and hybrid activities of the Losange: the “Horse” subsidiary, but also the non-electric cars of the Renault brand, its utilities and Dacia.
This new part of its strategic plan, called “Revolution”, should bring Renault to an operating margin of more than 8% at group level in 2025 and more than 10% in 2030.
While it aimed under Carlos Ghosn to “push sheet metal”, Renault must become a “countercyclical company”, launched the general manager of Renault, Luca de Meo.
The group intends to list Ampere on the Paris Stock Exchange “at the earliest in the second half of 2023” and thus finance, thanks to the contribution of fresh capital, its costly electric shift while retaining “a strong majority” in the subsidiary.
The valuation of traditional automotive groups pales in comparison to that of new entrants specializing in electric cars, such as the American Tesla of Elon Musk, or the Chinese BYD. Separating electrical activities helps attract investors with higher expected rates of return.
The American manufacturer of electronic chips Qualcomm, supplier of Renault, has already positioned itself as a shareholder of Ampere.
Renault shares fell at the opening of the Paris Stock Exchange before recovering around 11 a.m.
And Nissan?
A big question remains unanswered: Renault, of which the French State and Nissan each own 15%, must still specify the share that its Japanese partner will take in its new electric subsidiary.
This reorganization in fact precedes a major overhaul of the Renault-Nissan-Mitsubishi alliance, with a reduction in Renault’s share in Nissan’s capital, which must be specified “in the coming weeks”, underlined Mr. De Meo.
Renault, whose finances remain fragile, also intends to restore a dividend in 2023, while it has not paid since 2019.
He intends to increase employee shareholding to 10% of the capital in 2030, whereas it is currently 3%.
These financial targets are “much more ambitious than expected” but “raise questions,” commented RBC analyst Tom Narayan. “How will Ampere be separated from Power, given that these entities share operations? »
The Alpine sports brand will also grow by opening up to investors and expanding in particular to North America and China.
The group also announced a strengthening of its partnership with Google for a new infotainment system from 2026.