Renault sets out targets for EV unit, won’t sell it cheap

By Gilles Guillaume and Silvia Aloisi

PARIS (Reuters) -French car maker Renault (EPA:) said its electric vehicles unit Ampere would see revenue more than treble to 10 billion euros ($10.8 billion) in 2025 as it sought to fire up doubtful investors ahead of a planned market listing of the business next year.

The group set out financial targets for the unit, including revenue of 25 billion euros in 2031, break-even in 2025 and an operating margin of at least 10% from 2030, ahead of an investor day in Paris.

The planned initial public offering (IPO), slated for next spring, has been complicated by slower demand for EVs, choppy markets and increased Chinese competition, with sources close to the deal telling Reuters last month that CEO Luca de Meo’s hoped-for valuation of 8 billion to 10 billion euros looked over-ambitious.

De Meo said on Wednesday that Renault had enough cash to finance Ampere’s growth without an IPO but that the listing remained its preferred option as the cash raised would allow it to accelerate its development and pay dividends sooner.

But he said he would scrap the IPO plan if the valuation was too low.

“We are not crazy,” he told reporters.

Sources close to the matter told Reuters last month the company was unlikely to go ahead with the IPO if the overall valuation for Ampere fell below 7 billion euros. De Meo declined to give a red line for the IPO.

Renault also announced on Wednesday the launch of a new EV Twingo, called Legend, at less than 20,000 euros as European car makers face increased competition from cheaper Chinese models.

“We want to democratise EVs in Europe. We will reduce our costs to lower our prices, while improving our margins at the same time,” finance chief Thierry Pieton said.

($1 = 0.9195 euros)