Biplab Das 
Renault’s plans to take its electric vehicle (EV) business, Ampere, public through an initial public offering (IPO) face hurdles due to softer EV demand, intensified competition from China, and market volatility. The French automaker had initially aimed for the IPO in the second half of 2023 but now plans for a spring listing in 2024. However, the IPO’s success is uncertain, especially if the final valuation falls below EUR 7 billion, with suggestions that it could be as low as EUR 6 billion.
Challenges in Achieving Valuation
Renault’s aspiration to achieve a EUR 10 billion valuation for Ampere has been met with skepticism from analysts. The current market conditions for IPOs, along with concerns of slowing EV growth, pose challenges for realizing the desired valuation. Several other European companies have canceled IPO plans due to similar market conditions.
Radical Overhaul Plan
The Ampere IPO is part of a comprehensive restructuring strategy led by Renault’s CEO, Luca de Meo. The plan includes the spin-off of Renault’s engine business through a partnership with China’s Geely and Saudi Arabia’s Aramco, as well as significant changes within its Nissan alliance.
Market Conditions and Valuation
Renault acknowledged the short-term market pressure but pointed out that the EV market share in Europe increased to 20% in 2023 from 15% in the previous year. Independent studies estimate a sectoral revenue growth of 20% or more annually by 2030.
Valuation Discrepancy
Analysts’ valuations for Ampere have varied widely. UBS analysts estimated a value of EUR 3-4 billion, while Barclays put it at EUR 5 billion. However, Renault mentioned that these estimates were among the lowest published so far and that analysts might not have all the key metrics to assess the company’s value.
Determination to Proceed with IPO
Despite the challenging market climate, Renault remains determined to proceed with the IPO, which is expected to involve approximately 20% of Ampere’s share capital. Additionally, Renault’s allies, Nissan and Mitsubishi, have committed to investing up to EUR 800 million in Ampere, securing around 10% of the shares.
Ampere’s Ownership Structure
Upon completion of the IPO and stake sales to Nissan and Mitsubishi, Renault will retain ownership of Ampere, expected to range between 60% and 70%. These figures are subject to change depending on the final outcomes.
Market Volatility and Timing
Other electric vehicle manufacturers have experienced significant market value fluctuations recently. Market conditions will influence the timing of the Ampere IPO, which could take place as early as April 2024, contingent on market stability and favorable conditions.
