Renault may sell off Nissan stake, invite investment for new EV arm Ampere

Renault SA wants to start selling a 28% stake in long-time partner Nissan Motor Co. “very soon" as part of the French carmaker’s ambitious electric-vehicle development plan, which includes an initial public offering of its EV arm Ampere.

Sales of the stock could start in early 2024, Renault Chief Executive Officer Luca de Meo said Wednesday in an interview with Bloomberg Television’s Caroline Connan. The selling will be coordinated with Nissan, he said.

“You don’t want to get too many shares in the market immediately," he said. “We will use that money for other things."

The stake, worth about €4.3 billion, gives Renault options should it decide not to press ahead with the IPO of Ampere. The funds could be used to help the carmaker speed up development of cheaper EVs and take on rivals such as Tesla Inc. more quickly.

While de Meo still aims for an Ampere IPO in April or May, he’s not ruling out shelving the listing if valuation doesn’t meet his expectations of €8 billion to €10 billion for the business, which began operating independently this month. Other options could be on the table, including a spinoff, de Meo said.

“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 markets evolve. You don’t want to put yourself in trouble."

Renault is targeting more than €10 billion of revenue by 2025 for Ampere, the company said Wednesday, when it’s holding a briefing for investors on the EV business.

Ampere plans to introduce Legend, a compact, Europe-made EV that will sell for less than €20,000, as the battle for more affordable cars heats up in a region where consumers have been hit by a cost-of-living crisis.

The vehicle could potentially be manufactured in Slovenia, but no final decision has been made, the CEO said.

To pull off the Ampere IPO, Renault will have to win over investors in what’s a difficult market for listings alongside a bruising price war in the electric-vehicle market.

The 56-year-old CEO is pitching Ampere as a European response to competition from US rival Tesla Inc. and Chinese EV manufacturers. Still. the market for IPOs remains unwelcoming and there are worries that selling a stake will be excessively dilutive to existing shareholders.

Nissan and Mitsubishi Motors Corp. will invest a total of as much as €800 million in the entity, and Qualcomm Inc. also is considering investing.

The Qualcomm investment “is being finalized" and should be unveiled “very quickly," Chief Financial Officer Thierry Pieton said during a media call earlier Wednesday.

Mitsubishi and Nissan would still invest in Ampere but “in a different form" if the IPO is shelved, Pieton added.

“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’s no other pure EV player in Europe today."

Renault has loosened ties with Nissan after the alliance turned sour in recent years. The French company placed 28% of Nissan’s stock in a trust, from which it can be sold. The two carmakers now have a cross-shareholding of 15% with lock-up and standstill obligations.