French carmaker Renault Group on Wednesday outlined ambitious plans to transform its newly-carved out electric vehicle business, Ampere, into a European giant that is able to rival the world’s top EV manufacturers, while making billions each year selling low-cost electric cars.
In lining the company up for an initial public offering (IPO) in 2024, Renault sought to build investor excitement around Ampere as it unveiled the company’s new low-cost city car, called Legend, and said it is aiming to grow the firm’s revenues by 30% each year between 2023 and 2031.
Shares in Renault
increased 2% on Wednesday with stock in the Paris-listed carmaker having increased 7% over the previous 12 months.
The plans will see Ampere, which was carved out from Renault on Nov. 1, aim to slash the costs of EVs by 40% over the next four years, with a view to ensuring its electric cars achieve price parity with internal combustion engine (ICE) vehicles by 2027/28.
The strategy will see Ampere bring four new low cost EVs to market by 2025, with a view to generating €10 billion a year in revenues, before expanding its range to include seven “competitive” electric cars by 2031, in its push to make annual revenues of €25 billion.
In a presentation to investors, Renault CEO Luca de Meo also unveiled Ampere’s new Legend budget EV, which it plans to sell at prices of below €20,000 a year, in its push to “democratize” electric cars and capitalize on Europe’s fast-growing EV market. At prices below €20,000, Ampere’s Legend will also be significantly cheaper than Tesla’s EVs.
The Renault chief, in turn, sought to appeal to European investors’ patriotic sentiments, as he urged them to back Ampere as a European alternative to U.S. giant Tesla and China’s top EV makers.
“Ampere is an ambitious, holistic, and structural response of the European industry to the challenges coming from East and West,” de Meo said in a statement.
In outlining the rationale for an IPO, Renault’s chief financial officer Thierry Piéton said: “The IPO is an opportunity to further accelerate the development of Ampere without drawing on Renault Group resources”
Piéton, however, said Renault will not go ahead with an Ampere IPO “at any price,” as he said the carmaker is willing to wait until market conditions are favorable.
“Because we’re so convinced of Ampere’s value, we will not do it at any price,” the finance chief said. “We are preparing for an IPO in the first half of 2024, but will proceed only if we’re comfortable that the market will sustain the right valuation for this great franchise.”