Tech

Renault plans to separate its electric car division from the rest of the group

Renault could soon separate its electric car division from the rest of the company. Anxious to save itself from colossal investments, the French automotive group is considering a major restructuring.

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Renault is studying the possibility of separate its electric car business of the rest of the company, report our colleagues from Reuters. The French automaker does not hide that the idea is currently on the table. Last month, Ford announced a similar decision.

The information had already filtered a few weeks earlier thanks to analysts at the investment bank Stifel. “The management team continues to conduct exploratory work with a view to eventually splitting the company into two entities”explained a report by Stifel, assuring that the management of Renault studied the question with experts during a meeting at the end of March.

On the same subject: Why did the Renault Zoe and Dacia Spring obtain catastrophic marks in the Euro NCAP test?

Renault plans major restructuring and IPO

Renault’s decision would be motivated by major investments necessary for the development of electric cars. While its sales are at half mast, the French group would not feel up to taking on these massive investments. Renault has just announced lower financial results, with sales down 2.7% over one year.

“The fall in the automotive market in Europe linked to the shortage of semiconductors, mainly affecting sales of the Renault brand”, explains the company. The war in Ukraine contributed to the decline in the group’s income. Renault has suspended all activity in its Moscow factories. In addition, the French firm has chosen to suspend its stake in Avtovaz, the most popular car manufacturer in Russia thanks to its Lada brand.

In order to contract its investments, Renault also plans to reduce its stake in Nissan. This measure would aim to “raise billions of euros for its transition to electric vehicles” and to ease tensions with its partner Nissan, underlines Reuters. The two groups are indeed linked by an alliance.

As part of this reorganization, Renault could consider an IPO of its future independent electric car division. “An IPO of the assets could be considered for 2023”assured Stifel last month.

For its part, Renault claims to study “the opportunity to consolidate its 100% electric activities and technologies within a dedicated entity in France to accelerate their growth”. Thanks to this approach, the company still aims to sell only 100% electric cars by 2030.

Source : Reuters

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