French automotive giant Renault has opted to abandon its plans for an initial public offering (IPO) for its electric vehicle (EV) business, Ampere, attributing the decision to sluggish conditions in the stock market.
Renault CEO Luca de Meo had previously indicated in September that the IPO for Ampere could potentially be valued at up to 10 billion euros. However, the demand for electric vehicles in Europe has seen a decline, with regional car manufacturers facing intense competition from their Chinese counterparts.
The primary goal of the proposed IPO was to enhance Ampere’s visibility and separate it from the combustion engine business known as Horse, ultimately unlocking more value for the EV vertical.
Renault emphasized that it possesses sufficient cash resources to forego the IPO. CEO Luca de Meo stated, “Today, we took a pragmatic decision. We are all focused on executing our strategy and building our track record to create value for all our stakeholders.”
Groupe Renault has affirmed its commitment to funding Ampere’s development until it achieves break-even status in 2025, as outlined in an official statement. The decision to cancel the Ampere IPO process aligns with the company’s broader strategic plan, Renaulution, which is self-funded.
The company had initially announced its intention to pursue an IPO for Ampere in the first half of 2024, but by late 2023, it expressed reservations about proceeding if the valuation was deemed too low.
In December of the previous year, long-standing alliance partners Nissan and Mitsubishi confirmed their plans to invest in Ampere, even if the IPO did not materialize. Additionally, chip maker Qualcomm, expected to invest in Ampere, had its participation contingent on the IPO taking place.
Renault’s Chief Financial Officer, Thierry Pieton, mentioned in a conference call that discussions with potential investors, including Qualcomm, would be held to explore alternative investment structures.
Challenges such as the decline in EV demand, heightened competition from China, and overall market volatility were cited as factors complicating Renault’s plans to list Ampere. The proposed listing, which would have been a positive development for the stock market, was impacted by a challenging 2023 marked by rising interest rates.
