Renault surprisingly cancels the IPO of its Ampere electric unit

The Renault Group has surprisingly decided to cancel the IPO of its Ampere electric unit, but has confirmed its strategy aimed at development and software. No later than 15 November, the transalpine manufacturer had presented the Ampere project in detail at the Capital Market Day, with a view to a possible stock market debut of its new 'pure Ev player', a dress rehearsal of the European Tesla. The programme spoke of the first half of 2024. "Provided that market conditions are favourable," they had warned from Boulogne-Billancourt.

Something, in fact, has dampened the momentum. The market estimates that demand for electric cars (Ev) is declining or stagnating after a 2023 growth. Economic uncertainty has begun to dampen purchases, as consumers are not convinced that electric vehicles meet their needs in terms of safety, range and, crucially, price. The plummeting residual value of used electric cars, following the price war started by Tesla, and the idea that one might postpone the purchase pending advances in technology, batteries for example, is also discouraging the general public. Meanwhile the enthusiasts (the early adopters) have already bought their Ev, how many will follow? Some commentators have spoken of a 'valley of death', referring to a period between 2024 and 2026-7: low residual values, high supply and low demand.

Not surprisingly, the first countermeasures have arrived in recent months. Several manufacturers have revised their workforce numbers downwards, from the Volkswagen Group to Ford, from Stellantis to Polestar (which has just announced a cut of 450 jobs, or 15% of its workforce). Less than a week ago Tesla estimated a 'significantly lower' growth rate in 2024, news that sent the stock plummeting 12 per cent.

So it is that the financial plans of Ampere, set up to 'democratise the electric vehicle in Europe' faster than its competitors, also come to a halt. This is not an isolated case: in 2023, the volume of IPOs worldwide fell by 8%, with a 33% year-on-year drop in funding.

The French group said in a note that the decision takes into account 'current market conditions'. However, 'the entire Ampere team is fully committed to executing its strategy and building its track record'. The financial targets include a turnover of more than EUR 10 billion by 2025, a balanced budget in 2025, a turnover of EUR 25 billion in 2031, and an operating margin of at least 10 per cent from 2030 onwards. Ampere, which started operating separately from its parent company on 1 November, is expected to have a turnover of around EUR 2.8 billion this year, according to Renault. It aims to sell 300,000 vehicles in 2025, up from 45,000 in 2023. The sales volume bar has been set at 1 million Ev in 2031.