Renault, the French car manufacturer, has revealed ambitious revenue targets for its electric vehicles unit, Ampere. The company plans to list Ampere on the market in 2024, aiming for 10 billion euros in revenues by 2025 and a substantial increase to 25 billion euros by 2031.
Financial targets and IPO plans
Ahead of an investor day designed to garner support for the upcoming initial public offering (IPO) in spring 2024, Renault has outlined financial goals for Ampere. These include an expected break-even in 2025 and a targeted operating margin of at least 10% starting from 2030.
Commitment to value
Renault’s Finance Chief, Thierry Pieton, affirmed the company’s commitment to Ampere’s value. He emphasized that Renault would not undersell Ampere and expressed confidence in the company’s cash flow to continue financing the unit if the desired IPO valuation isn’t achieved.
“We are not going to give it away,” Pieton asserted.
Options for Ampere
Addressing potential alternatives, Pieton noted Renault’s openness to exploring other options for Ampere, with an IPO being the preferred choice. When asked about the possibility of distributing Ampere shares to existing Renault shareholders instead of proceeding with the IPO, Pieton confirmed Renault’s willingness to consider various paths.
CEO’s valuation targets
Renault’s Chief Executive, Luca de Meo, has set a valuation target of 8-10 billion euros for Ampere. However, challenges such as slower demand for electric vehicles (EVs), market uncertainties, and heightened competition in China have added complexity to achieving these aspirations.
Realistic valuation considerations
Sources close to the matter revealed that the envisioned price tag by de Meo seemed over-ambitious at this stage. If the overall valuation for Ampere falls below 7 billion euros, the company is likely to reassess its plans, indicating a pragmatic approach to ensure realistic expectations in the current market conditions.