The company outlined financial objectives for Ampere, including a revenue target of 25 billion euros by 2031, break-even in 2025, and a minimum operating margin of 10% from 2030.Alongside these targets, Renault unveiled a more compact and cost-effective electric vehicle model.
Despite challenges arising from slower electric vehicle demand, market volatility, and heightened competition from China, Renault defended its initial public offering (IPO) plans, originally delayed and now scheduled for next spring. CEO Luca de Meo acknowledged the hurdles but stressed the IPO’s importance, stating Renault had sufficient funds for Ampere’s growth without it. However, he insisted that the IPO remained the preferred choice, enabling accelerated development and earlier dividend payments.
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De Meo clarified that the IPO could be abandoned if the valuation was deemed too low, stating, “We are not crazy.” Sources hinted that Renault might reconsider the IPO if Ampere’s overall valuation fell below 7 billion euros.
Despite calls from analysts to explore alternative fundraising options, including selling a 28% stake in Nissan, De Meo refrained from specifying a red line for the IPO valuation.
Investment boutique Niche Asset Management’s founder, Massimo Baggiani, viewed carving out Ampere as a logical move to create a more agile business separate from Renault’s conventional operations. However, doubts lingered about Ampere’s ability to achieve Renault’s ambitious growth expectations.
UBS analysts, while acknowledging a well-framed development plan, maintained a conservative valuation of 3 billion-4 billion euros for Ampere. They highlighted the uncertainty in financial performance, primarily focused on 2025-2030.
In a parallel announcement, Renault introduced a new electric vehicle, Twingo Legend, priced below 20,000 euros, as European car manufacturers contend with increasing competition from Tesla and more affordable Chinese models. Finance chief Thierry Pieton emphasized the goal of democratizing the electric vehicle market by reducing production costs to lower final prices without compromising margins. However, UBS analysts expressed skepticism, calling for tangible evidence of success and profitability for the new model priced at 20,000-25,000 euros.
