two poles for a better return to electricity

French carmaker Renault presents its future activities on November 8, 2022 (Lou BENOIST / AFP/Archives)

Carmaker Renault is preparing for a historic turnaround on Tuesday with the creation of two subsidiaries: Ampere, which will focus on its electric future, and Horse, which will bring together its heat engine activities overseas.

The French group is due to finalize the outline at 7:00 a.m. (06:00 GMT) ahead of a day dedicated to investors in Paris.

The flagship of the project is called Ampere. This new spin-off promises to grow strongly in Europe after the European Union’s 27 Member States and Parliament ratify a ban on new cars with combustion engines in 2035, which will oversee the production of electric cars.

The enterprise should bring together around 10,000 employees from 157,000 groups worldwide (Renault, Dacia, Alpine, Mobilize), all based in France.

Renault plans to accept Ampere investors, but it will remain the majority shareholder. The facility will produce R5 and 4L electricity, especially in the north of France.

After a historic loss in 2020, Losanj’s finances are still recovering and have been further weakened by its exit from Russia.

The group, which is an electric pioneer, needs big investments to accelerate in this area, according to its plan called “Renaulution” and presented in the spring of 2021.

But the valuations of traditional car groups pale in comparison to those of new companies specializing in electric vehicles, such as America’s Tesla or China’s BYD.

Investors showed interest as Renault shares rose 3.77% to 31.66 euros on the Paris stock exchange on Monday. American Ford has already announced a similar operation with the creation of the Ford Model E.

Alliance reorganization

This is Renault’s other major change in 2022: a major restructuring of the alliance with Nissan, led by the diamond brand’s general manager Luca de Meo and his Japanese counterpart Makoto Uchida.

That should come after a 23-year relationship that has been both tumultuous and fruitful, when Renault could reduce its stake in Nissan to 15%, down from 43% now.

Nissan, a historic partner of the French brand through the Renault-Nissan-Mitsubishi alliance and a shareholder of up to 15% in Renault, plans to invest in the electric subsidiary. However, the level of technological cooperation remains to be determined.

According to a source close to Nissan, discussions between the French group and the Japanese could extend from November 15, when the leaders of the three groups are due to meet in Japan.

“We have many points to resolve, I wouldn’t say they are easy discussions, but we will get there,” Makoto Uchida said in an interview published by French media on Friday. “Content must be mature, robust”.

In early 2022, the three members of the alliance, the world’s third largest car group, announced that they will invest 23 billion euros in electrification over the next five years to bring 35 new electric models to market by 2030.

Thermal horse

At the same time, Renault plans to combine its activities in the field of thermal and hybrid engines and transmissions (gasoline and diesel) in another entity called “At” (at).

It will bring together more than 10,000 employees in factories and R&D in Spain, Portugal, Turkey and Latin America.

Even if the French group remains the “reference shareholder”, this time it will be a minority shareholder. Mr Uchida stressed that Chinese carmaker Geely was particularly close to entering the capital, and that Nissan would not be opposed.

The share of thermal cars in its sales continues to decline: in the first nine months of 2022, hybrid and electric cars already accounted for 38% of the brand’s registrations in Europe (+12% for a year).

After several waves of job cuts at Renault, this separation of activities worries the unions. The CGT opposed the “breakup of the company” in early September and wanted Renault to remain “a related company that retains all the trades of a car manufacturer”.

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