The board of directors of the French car manufacturer Renault on Monday entrusted its managing director, Luca de Meo, with the reins of its new electric subsidiary, Ampere. Ampere’s future CEO will “ensure the launch of the company and the success of its IPO project, while retaining his current responsibilities as Renault’s CEO,” the group said in a statement.
Ampere must bring together the electrical activities of the group, i.e. 10,000 employees in France. This subsidiary will notably produce the electric Megane and the future Renault 5, Renault 4 and electric Scénic in Hauts-de-France. It aims for more than 30% annual growth over the next eight years, as the European automotive market becomes more electrified.
It also aims to reduce its costs “by 40% per car for the next generation of vehicles by 2027 and beyond”, in particular by improving “the productivity of manufacturing to the best levels, reaching less than 10 hours of time of production per vehicle”.
“Luca de Meo’s success in turning around Renault Group makes us very confident for the future,” said Jean-Dominique Senard, Chairman of the Board of Directors of Renault. “He is uniquely positioned to drive Ampere’s critical operational success to the group and ensure its future growth in a transforming mobility industry,” he added.
It must also be said that Luca de Meo is very knowledgeable about this kind of strategy because, previously at the head of Seat, he successfully created the Cupra brand, which is both more upscale, sporty and with an electric vocation. Such a success that Cupra, generating better margins, is gradually taking the place of Seat from the Barcelona channels, perhaps to the point of totally ousting them one day. This game of communicating vases obviously registers Renault in a parallel approach, even if it is not a question of supplanting the diamond, but of supporting it with Alpine.
The Board of Directors has also formed a committee, chaired by Mr. Senard, responsible for monitoring Ampere’s IPO project. The group plans to list Ampere on the Paris Stock Exchange at the earliest in the second half of 2023 and thus finance its costly electric shift. Like Ford’s Blue subsidiary, this entity aims to be as attractive to investors as the American Tesla or the Chinese group BYD.
Renault’s partners in the Alliance, the Japanese Nissan and Mitsubishi, have already confirmed that they will invest in Ampere.
However, Renault intends to retain a strong majority in the subsidiary because it is “the future of the brand”, 100% electric in Europe in 2030, the group’s financial director, Thierry Piéton, pointed out at the end of 2022. “Ampere is a value-creating project, with a compound annual growth rate (CAGR) revenue target of 30% through 2030. With 80% of its investments already made, Ampere aims to breakeven operating profit and free cash flow by 2025, and a double-digit margin by 2030.”
The entity will also be responsible for supplying batteries and designing software installed in cars, in partnership with Google and Qualcomm. This American electronic chip giant should also take a small share of Ampere.
