Renault Considers Spinning Off EV Division
2022-05-13 9:30   |  Editor:et_editor  |  192 Numbers

Renault is rumored to be considering an IPO to separate its electric vehicle (EV) business from the group, a shocker for the future of the Nissan-Renault alliance.

The impact of EVs on traditional car factories is immense, and the Renault-Nissan-Mitsubishi Alliance, which has held together for many years, has given birth to new changes. According to foreign media reports, Renault is considering an independent EV business, which is likely to list through an IPO (initial public offering), estimated to fall in the second half of 2023.

In March, Ford announced the establishment of Ford Model e as an EV company while its gasoline car business is called Ford Blue. Renault may also defer to this idea which may bring two benefits.

First of all, of course, is funding. Renault is currently part of the Renault-Nissan-Mitsubishi Group. Originally, the three automakers shared costs and could save on expenses. However, in the transition to the era of EVs, more open source is needed than throttling. Conservative group thinking and outdated fuel vehicles is a burden stuck on the road of innovation.

Second is the issue of supply chain and dealers. Behind the glossy factory logo of the car manufacturer, are actually bonds to Tier 1 supply factories everywhere and sales are held hostage by dealers. Many car factories do not want to follow Tesla into new online car sales but there are too many businesses involved.

The new company can create buzz through an IPO, absorb external funds, and be fully controlled by Renault itself. At the same time, it has the opportunity to drop various past constraints and transform into a more integrated form, mastering car manufacturing, sales, and maintenance, and maximizing revenue. .

According to Bloomberg, Renault is in discussions to divest its stake in Nissan Group. If Renault reduces its 43% stake to 15%, it will be exchanged for US$5 billion to fully invest in EV research and development and new company operations.

The Renault-Nissan-Mitsubishi Group has been established for 23 years. During such a long-term partnership, a lot of pressure has accumulated. Nissan has lost its leadership in EVs, while Renault is striving to move upstream in the European pure EV market. The two parties are jointly promoting pure electric recreational travel.vehicles, the Nissan Ariya and Renault Megane. Perhaps we will see the transformation of this trinity in the next two years and the map of the global auto market will be reshuffled.