Renault SA is targeting more than €10 billion ($10.9 billion) of revenue by 2025 for its electric-vehicle and software arm Ampere, which the French carmaker aims to list in an initial public offering in April or May next year.
Ampere also plans to introduce Legend, a compact, Europe-made EV that will sell for less than €20,000, the company said Wednesday, as the battle for more affordable cars heats up in a region where consumers have been hit by a cost-of-living crisis.
Renault is holding a capital markets day Wednesday for Ampere, where the company will seek to win over investors in what’s a difficult market for listing alongside a bruising price war in the electric-vehicle market.
Renault Chief Executive Officer Luca de Meo is pitching Ampere as a European response to competition from US rival Tesla Inc. and Chinese EV manufacturers. The 56-year-old executive is targeting an ambitious valuation of €8 billion to €10 billion for Ampere despite an unwelcoming market for IPOs and worries that selling a stake will be excessively dilutive to existing shareholders.
Ampere, which started operating separately from its parent on Nov. 1, will have sales of about €2.8 billion this year, the company said.
Read more: Renault Casts EV Business Ampere as Europe’s Answer to Tesla
In an interview with Bloomberg last week, de Meo said he had no intention of pricing the Ampere IPO at a discount, and that the listing would be “only one piece” of a longer-term project. Renault recently loosened its ties with Nissan Motor Co., and has the option of selling the 28.4% stake in its long-time partner that it recently transferred into a fund to finance Ampere’s EV plans rather than hold an IPO.
Renault reiterated Wednesday that it’s aiming for an Ampere IPO in the first half of next year. 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 on Wednesday.
De Meo wants to proceed with an IPO to attract new investors in Ampere. He may shelve the listing below a valuation of roughly €8 billion, Bloomberg reported this week, citing people familiar with the situation.
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, Pieton said when asked if a spinoff also could be on the table.
Read more: Renault Should Pick Spinoff Over IPO for its EV Arm: Jefferies
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.”
(Updates with CFO comment in final paragraphs.)