Renault is banking on significant cost reduction on future electric vehicles to unlock hitherto elusive EV profits and take the fight to Tesla and China's car makers.
That was the pitch by CEO Luca de Meo and chief financial officer Thierry Piéton to investors on Wednesday to sell them the benefits of Renault’s new Ampere electric division, which it wants to float on the stock market in the first half of 2024 - if it can achieve a solid valuation.
“Ampere is there to democratise EVs in Europe with cars that people can afford,” de Meo told investors at the event in Paris. “Our ambition is to close the gap, reaching EV and ICE price parity before our competitors.”
De Meo’s rallying cry to market Renault, since joining in 2020, has been that the company is moving into bigger, more profitable sectors to avoid becoming quite so dependent on small cars.
However, to underline the point about affordability, de Meo temporarily reversed that impetus to unveil a concept previewing a new electric Renault Twingo small car with a promised price of below €20,000 (£17,000). “Pure player competitors are lagging behind. So far, they have zero or very limited offer in the B-segment in Europe,” de Meo said.
Renault has been a long-time leader within the European EV sector with its Renault Zoe small car and has built on some of that with the 2022 Mégane E-Tech and forthcoming Scenic E-Tech electric SUV, both of which sit on a dedicated electric platform.
So far, though, Renault has failed to convince the stock market that it has the ability to head off considerable disruption in the EV space from swifter, more innovative players like Tesla, despite an impressive turnaround in its overall business leading to recent record profits.
Renault’s riposte to what it sees as the unwarranted indifference of the investment community is to spin off Ampere to create a separate division tasked with developing and building EVs mainly for Renault but also for Alliance partners Nissan and Mitsubishi. It will also look to create new revenue from the software that’ll power them.
“This is a fundamental reshuffle of our business model,” de Meo said. He told the assembled banking community that while 80% of Renault’s revenue today comes from “mature” segments, half of its business by 2030 will be focused on activities with “double-digit growth and double-digit profitability”.
De Meo unveiled a timeline for Ampere’s EV roll-out for Renault, including the Scenic and Renault 5 small hatchback next year, the Renault 4 small EV in 2025, Twingo in 2026 and two new models arriving before the end of the decade.
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