Renault Group, the French automaker, has announced that it will not go ahead with its planned initial public offering (IPO) of its electric vehicle (EV) and software business, Ampere. The decision was made due to unfavorable market conditions and the group’s improved cash flow.
Ampere was created by Renault Group in 2022 as a separate entity to focus on developing and selling EVs and software solutions in Europe. The company aimed to democratize EVs in the region by offering affordable and innovative products, such as the Scenic, Renault 5, Renault 4, and Twingo models.
Ampere also had a strong tech plan to differentiate itself from competitors with software and artificial intelligence (AI) solutions, such as OpenR Link, Reno Avatar, and Software-Defined-Vehicle. The company claimed to have the most compact and efficient industrial EV ecosystem in Europe, with investments in battery production, recycling, and charging infrastructure.
Renault’s IPO plans and challenges
Renault Group had announced its intention to proceed with an IPO for Ampere in the first half of 2024, depending on market conditions. The group’s CEO, Luca de Meo, who also heads Ampere, said in September 2023 that the IPO could be worth up to 10 billion euros.
However, the IPO faced several challenges, such as weaker EV demand in Europe, increased competition from Chinese rivals, and market volatility. Reuters reported in November 2023 that Renault Group was considering postponing or canceling the IPO if the valuation was too low.
In December 2023, Renault’s longstanding alliance partners, Nissan and Mitsubishi, confirmed their plans to invest in Ampere. Renault reiterated on Monday that these companies were still interested in investing in Ampere even without the IPO. Chip maker Qualcomm was also expected to invest in Ampere, but its investment hinged on the IPO taking place.
Renault’s decision and outlook
Renault Group said on Monday that it had decided to cancel the Ampere IPO process, citing unfavorable market conditions and stronger cash generation. The group said that its strategic plan, Renaulution, was self-funded and that the results for 2023 confirmed its ability to finance its future, including Ampere’s development.
The group also said that it would continue to fund Ampere until it reaches breakeven in 2025 and that all the targets announced during Ampere’s Capital Markets Day were confirmed. The group added that this decision had no impact on its financial guidance and capital allocation strategy.
“I’m extremely proud of our teams who created in less than two years the best answer to top global players’ competition with Ampere. By setting up a 100% focused EV and software business, we built in record time an agile and competitive entity. We have the start-up mindset which allows us to constantly innovate. This is exactly what will make Ampere successful in this new challenging environment. 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,” said de Meo in a statement.