Renault sets out target for Ampere EV unit; will launch low-cost electric car

PARIS -- Renault Group outlined its targets for its Ampere electric vehicles unit including a raft of new models as it sought to fire up doubtful investors ahead of a planned market listing of the business next year.

Ampere plans a lineup of seven EVs by 2031, including a city car costing less than 20,000 euros ($22,000) to replace the current Twingo. Luca de Meo, who is CEO of both Renault and Ampere, showed the model to investors on Wednesday at a capital markets day for Ampere.

The new Twingo will launch in 2026 and will be built in Europe. It will offer best-in-class efficiency with energy consumption of 10 kilowatt hours per 100 km, Renault said. This compares with about 15 kWh/100km for most small battery-electric vehicles (BEVs) currently on the market.

Renault did not specify the car's production location but sources have said it will be produced from 2026 at Renault's factory in Slovenia, which builds battery-electric and combustion engine versions of the Twingo.

Ampere's lineup will also include the Megane E-Tech, launched last year; the Scenic E-Tech, which goes on sale early next year; the upcoming Renault 5 that will be revealed early next year; and the Renault 4 to be launched in 2025. There will also be two additional vehicles, Renault said.

CFO Thierry Pieton said Renault aimed to sell EVs at the same price as its combustion engine cars earlier than rivals, with smaller EV models reaching price parity in the next two years and bigger ones by 2027-28.

"We want to democratize EVs in Europe. We will reduce our costs to lower our prices, while improving our margins at the same time," Pieton said Wednesday.

Ampere targets sales of 300,000 EVs in 2025, up from 45,000 in 2023. Sales should rise to 1 million cars in 2031. With its current lineup, Renault said it was the No. 3-seller of EVs in Europe in 2022, behind Tesla and Volkswagen.

10% margin target

Renault set out financial targets for the unit on Wednesday, including more than 10 billion euros of revenue by 2025, reaching breakeven in 2025, revenues of 25 billion euros in 2031, and an operating margin of at least 10 percent starting in 2030.

Ampere, which started operating separately from its parent on Nov. 1, will have revenues of about 2.8 billion euros this year, Renault said.

Renault CEO Luca de Meo has targeted a valuation of 8 to 10 billion euros for the unit, but slower demand for EVs, choppy markets and increased Chinese competition have complicated his plans.

De Meo said on Wednesday that the automaker had enough cash to finance Ampere's growth without an IPO but that the listing remained its preferred option because 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. He declined to give a red line for the IPO.

"The stock exchange is there to foster performance, transparency," de Meo said. "It’s a good thing to list a company. We think we have potentially a window of opportunity in spring 2024, but let's see how the markets evolve. You don't want to put yourself in trouble."

Qualcomm may invest

Nissan and Mitsubishi Motors will invest a total of as much as 800 million euros in Ampere. Meanwhile, Qualcomm is considering investing. Pieton said the Qualcomm investment "is being finalized" and should be unveiled "very quickly."

On top of those deals, Renault aims to float about 20 percent of Ampere's capital, and will keep owning between 60 percent and 70 percent of the business.

Pieton said Renault will "always be open to exploring alternative options" for Ampere if the IPO doesn’t go through but the listing remains the main plan.

Mitsubishi and Nissan would still invest in Ampere but "in a different form" if the IPO is shelved, Pieton said. "They want to be part of this story,” Pieton said. "Ampere is unique, it's a real company that already produces cars, it's not a PowerPoint. There is no other pure EV player in Europe today."

Cutting production costs

Ampere says it employs more than 11,000 people, a third of whom are engineers, and aims to become a European leader in the EV market both for technology and the competitiveness of its cars.

To ward off increased competition from cheaper Chinese EVs, Ampere aims to reduce by 40 percent the cost of manufacturing cars through 2027 and beyond by offering fewer models and cutting costs at the conception and production stage.

It also aims to reduce the time needed to produce an EV to less than 10 hours.

Ampere has three factories in northern France. It will purchase batteries for its cars from Chinese-Japanese maker AESC Envision and French startup Verkor. Both have gigafactories near Ampere's plants.

Reuters and Bloomberg contributed to this report