Renault eyes separate IPO of EV business and assets


Renault is reportedly considering the possibility of a deep restructuring, followed by an initial public offering of its electric vehicle assets. Although the company hinted at a potential split into separate electric and internal combustion engine brands in February, it was not taken seriously. At the time, many automakers suggested splitting along a similar route.

But Ford said it would go ahead with the plan in March, and Renault also appeared to support the idea, according to a meeting between senior management and analysts last week. These include Chief Executive Officer Luca de Mayo and Chief Financial Officer Thierry Piton, both of whom reportedly acknowledged a real possibility of the French automaker’s breakup and subsequent IPO.

“The management team continues exploratory work with a view to potentially splitting the company into two entities,” Stifel analysts, including Pierre Quemener, said in a statement. Bloomberg.

One of those businesses will be “New Mobility,” focusing on electric vehicles using the assets of Renault’s Mobilize Share car rental service, which will be separate from its legacy assets.

“CEO [Luca de Meo] These could be combined with potential partners,” the note continued. “An IPO of New Mobility’s assets could be considered in 2023. “

Mobilize, previously suggested by Groupe Renault, could serve as the basis for a new automotive division dedicated to “shared mobility and future mobility”. The summary revolves around the premise of using a “shared ownership experience” for small electric vehicles, which will reduce downtime. While Renault touted it as a way to reduce CO2 emissions and help achieve Europe’s carbon neutrality target by 2040, it quickly fell into the predicament. The press releases also reference concepts such as the circular economy and giving up ownership in support of trends driving goods-as-a-service — something any consumer advocate should vehemently oppose.

The company even showed off a prototype EZ-1 miniature car to help move the scene forward and pair it with Quad Bike Twizy As if it would stir everyone’s apatites in an imagined future that never owns a vehicle. The EV-1 is effectively a perpetual lease, and customers have to sync with their smartphones. The vehicle is permanently connected to the internet, which allows Renault to recharge based on mileage and time spent in the cabin. It’s a concept we’ve seen dozens of times before, and it’s never been easier to embrace, especially now that some of the biggest car-sharing companies are steadily exiting many markets after a few years of explosive growth.

Renault has been tight-lipped about this new forward-looking plan, so it’s unclear how (or if) Mobilize will change. The language used in the analysis gives the impression that Mobilize Share is being torn down to make way for an all-new EV division. But the automaker’s decision to stick with the mobile moniker makes me wonder if this is just another attempt at bringing ridesharing to the public. There’s a lot of buzz in the industry, probably because manufacturers think they’re making a fortune by turning car owners into permanent tenants.

Of course, that’s assuming there’s even a concrete EV plan at this point. The French automaker has other bigger issues to address, which may be prioritized, starting with AvtoVAZ.

from Bloomberg:

The potential for a major overhaul of Renault looms as it faces a crisis surrounding its long-standing business in Russia. Last month, Renault said it exited its second market by ceasing operations at its Moscow plant and saying it was evaluating available options for its AvtoVaz business, the country’s best-selling Lada brand.

The decision to break up the company not only helps avoid a costly withdrawal from Russia, but also raises money for the development of electric vehicles and technology. Renault lowered its forecast for group operating profit margin and free cash flow from automotive operations, citing the suspension of activities in Russia.

Renault shares fell to 0.9 [percent] At the open on Tuesday, losses since Russia’s invasion of Ukraine hit around 24 points [percent].

But the company had discussed the possibility of a reorganization before any official intrusion occurred. In its Feb. 18 earnings announcement, the automaker suggested breaking up the company, creating a division entirely focused on electric vehicles and launching a range of services.

“Renault is looking into bringing its 100 [percent] Electrical activities and technologies within a dedicated French entity to accelerate its development,” the press release reads. “At the same time, Groupe Renault is also working on bringing its activities and technologies closer to the [internal combustion] As well as hybrid engines and transmissions located outside of France, in a dedicated entity.

This sounds very similar to Ford Motor Company’s decision to create a Model E unit that plans to focus on all-electric models. While the Blue Oval is somewhat hesitant to publicly promote the concept of shared ownership, the division is tasked with developing new software and connected car technologies and services. Meanwhile, other brands have been open about how the transition to EVs will mean changing what car ownership will actually mean in the future. However, as lucrative as this business model can be, it is a huge risk for any business to end up in its traditional business, which might explain the desire to keep the two separate.

[Images: Bondart Photography/Shutterstock; Renault]

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