Renault, a French automaker, announced that its electric vehicle unit, Ampere, is projected to experience a more than three-fold increase in revenue to 10 billion euros by 2025. This step was taken to arouse investor interest in doubt prior to the plan to list the business shares next year.
The group details the financial targets for the unit, including revenues of 25 billion euros (Rp421.9 trillion) by 2031, breaking evenly in 2025, and operating margins at least 10% starting in 2030. In addition, Renault also introduced a smaller and more affordable electric vehicle model.
Although the project is faced with the challenges of slow demand for electric vehicles, unstable markets and increasing competition from China, Renault is still defending its plans for an initial stock offering (IPO), which has been postponed once and is now scheduled for spring despite various obstacles.
CEO Luca de Meo stated that Renault had enough cash to support Ampere's growth without an IPO. But the stock offering remains the main choice as the collected funds will allow for faster development and dividend payments.
"We are not crazy," said De Meo, confirming that the IPO would be canceled if the valuation was too low. However, sources close to the deal revealed last month that the company would most likely not continue the IPO if Ampere's overall valuation fell below 7 billion euros (Rp 118.1 trillion).
Although some analysts prompted Renault to explore alternative options for raising money, such as by selling 28% of shares in their old partner, Nissan, worth about 4.5 billion euros (Rp 75.9 trillion), De Meo declined to provide a minimum valuation limit for the IPO.
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The founder of the Aboutique investment of Niche Asset Management, Massimo Baggiani, stated that separating Ampere as a "lighter and more modern business separated from Renault dinosaurs" does have logic. However, he still questioned whether Ampere could grow as expected by Renault.
UBS analysts, in their report on Wednesday, reiterated Ampere's valuation of only 3 billion-4 billion euros. They stated that although the business development plan had been well regulated, "the financial performance turning point was mostly focused on 2025-2030, where visibility was still low."
Renault also announced the launch of a new electric vehicle model, Twingo Legend, at a price of less than 20,000 Euros (Rp 337.5 million), in an effort to democratize the electric vehicle market amid rising competition from Tesla and more affordable Chinese models.
However, UBS analysts are more skeptical. "We need more concrete evidence that the price of this new model of around 20,000-25,000 euros is successful and profitable," he said.
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