Renault said it will spin off its electric vehicle (EV) arm, Ampere, via a separate stock market listing next year as part of plans to split the group into five new ‘teams’.
Despite launching its first electric car in the 1930s, the French company has been overtaken by old and new rivals, so its new organisational structure is aimed to allow Ampere to produce a million EVs by 2031.
Based in France, this division will produce upcoming electric models such as the new Renault 4 and 5.
Ampere is one of five new and more "focused businesses", along with Alpine, a high-end zero-emission brand; Mobilize, "built around a leading financial services company to enter the market of new mobility, energy and data-based services"; the Future Is NEUTRAL, a circular economy company concentrating on battery recycling and other 'closed loops'; and Power, the traditional core business making hybrid and internal combustion engine powertrains.
To "reinforce" this fifth limb, the hybrid and ICE business is being flipped into a new 50-50 joint venture with China’s Geely, with a framework agreement signed to create a partnership that will have annual production capacity of 5mln powertrains for brands owned or linked to the pair, including Renault, Geely, Nissan, Mitsubishi, Volvo, Dacia, Lynk and Proton, with third-party cars potential too, later.
Among the many other moving parts of today’s capital markets day, the group said one overarching aim was to raise the quality of its debt from “junk” status to “investment grade”, enabling it to start paying first dividends since 2020.
Boss Luca de Meo set a target of lifting operating profit margins to 8% by 2025 and to 10% by the end of the decade, with a near-term aim of producing €2bn of cash each year from 2023, rising to €3bn in 2026.
Dividing into five “teams” will help the business “break down silos” and work faster, said de Meo, who wants workers to own 10% of the company’s shares by the end of the decade too.
Renault and Nissan are rumoured to be close to announcing a change in the structure of their two-decade alliance, where the French company rescued its Japanese partner from bankruptcy in 1999 but has endured a rocky few years of late.
A software services partnership with Google is also to be expanded, with the Alphabet Inc (NASDAQ:GOOG) company becoming the preferred cloud supplier to the carmaker and joint work to develop digital architecture.
Renault and Google said they will develop “a set of onboard and offboard software components” for the ‘software defined vehicle’ (SDV), where vehicle electronics can be updated remotely.
The pair have been collaborating on cloud computing since 2018.
This is to be accelerated with the creation of a ‘digital twin’, Renault said, “a virtual twin of the vehicle that will feature the most advanced Artificial Intelligence (AI) capabilities, for an easier and continuous integration of new services into the vehicle and the creation of new onboard (In-Car Services) and offboard applications”.
Eventually, the French company said it will move its entire operational model to the cloud.
Said de Meo: “The complexity of the electronic architecture of cars is increasing exponentially, driven by the sophistication of the functionalities and services expected by customers.”
With a shared IT platform, cars will be able to get “continuous over-the-air updates,” he said, with the SDV approach helping “serve future customers' needs [which] will increase residual value and after-sales retention, which are two key drivers of our financial performance, and help Renault to roll out our portfolio of new services”.