By on April 5, 2022

Renault SA is reportedly mulling over the possibility of undergoing extensive restructuring, followed by an initial public offering for its electric vehicle assets. While the company had hinted that splitting itself into separate EV and combustion brands was a possibility in February, it wasn’t taken all that seriously. At the time, numerous automakers had suggested dividing themselves along similar lines.

But Ford Motor Co. announced it would actually be going ahead with the plan in March and Renault appears to be similarly warming to the idea, based on a meeting held last week between upper-level management and analysts. This included CEO Luca de Meo and CFO Thierry Pieton, both of whom allegedly acknowledged the real possibility of a split at the French automaker and the subsequent IPO. 

“The management team continues to conduct exploratory works in view to split the company into possibly two entities,” Stifel analysts including Pierre Quemener wrote in a note shared by Bloomberg.

One of those businesses was said to be the EV-focused “New Mobility” utilizing assets from Renault’s Mobilize Share car-rental service, which will be separated from its legacy assets.

“The CEO [Luca de Meo] added that the latter could be combined with the ones of a potential partner,” the note continued. “An IPO of New Mobility assets could be contemplated for 2023.”

Renault Group’s previously suggested Mobilize could serve as the foundation for a new vehicle division dedicated to “shared mobility and the mobility of the future.” The abstract revolves around the premise of small EVs utilizing “shared ownership experiences” that would reduce downtime. While Renault presented this as a way to minimize CO2 emissions and help meet Europe’s goal of carbon neutrality by 2040, it quickly got into the weeds when it started making assertions about how this might also help maximize residual value somehow. Releases likewise mention concepts like circular economies and abandoning ownership in favor of advancing the goods-as-a-service trend — something any consumer advocate should probably be vehemently against.

The company even introduced the EZ-1 prototype microcar to help advance the premise, comparing it to the Twizy quadricycle as if that was going to whet everyone’s apatite an envisioned future of never owning your own vehicle. The EV-1 is effectively a permanent rental where customers are required to sync with their smartphones. The vehicle is perpetually connected to the internet, allowing Renault to charge based on mileage and time spent inside the cabin. It’s a concept we’ve seen floated dozens of times before and it never gets any easier to swallow, especially now that some of the largest car-sharing firms have been consistently retreating from numerous markets after a few years of explosive growth.

Renault’s being tight-lipped about this new, prospective plan, so it’s not clear how (or if) Mobilize is going to change. The language being used by the analysis makes it sound as though Mobilize Share is being dismantled to make way for an entirely new EV division. But the automaker’s decision to stick with mobility monikers makes me wonder if it will simply be another attempt to push ride-sharing onto the public. The industry cannot help but keep talking about this stuff, presumably because manufacturers believe they make a fortune turning vehicle owners into permanent renters.

Of course, this is assuming there’s even a concrete plan for EVs in place at this juncture. The French automaker does have other, much bigger problems to contend with and they may be taking precedence — starting with AvtoVAZ.

From Bloomberg:

The possibility of a deep overhaul of Renault is emerging just as the company faces a crisis surrounding its longstanding business in Russia. Renault last month signaled a retreat from its second-largest market by halting operations at its Moscow plant and saying it’s assessing available options for its AvtoVaz venture that makes the country’s top selling Lada brand.

A move to split the company would serve not only to deflect from a costly pullout from Russia, but also to raise funds for development of EVs and technology. Renault cut its forecasts for group operating margin and automotive operating free cash flow, citing the suspension of its business in Russia.

Renault shares fell as much as 0.9 [percent] at the start of trading Tuesday, taking losses since Russia invaded Ukraine to around 24 [percent].

But the company had been discussing the possibility of reorganization ahead of any formal invasions that took place. During a February 18th earnings announcement, the automaker suggested splitting the business so it had a division wholly dedicated to electric vehicles and introducing an array of services.

“Renault is studying the opportunity to bring together its 100 [percent] electric activities and technologies within a dedicated entity in France to accelerate their growth,” read the statement. “At the same time, Renault Group is also studying the opportunity to bring together its activities and technologies of [internal combustion] and hybrid engines and transmissions based outside of France within a dedicated entity.”

This seems highly similar to Ford Motor Co’s decision to create the Model E unit it plans to have focused on all-electric models. While Blue Oval has been somewhat hesitant to overtly push the concept of shared ownership, the unit has been tasked with developing new software and connected-vehicle technologies and services. Meanwhile, other brands have been pretty open about how the transition to EVs would mean changing what future vehicle ownership actually entails. However, as lucrative as that business model might be, it’s a big risk for any company to have wrapped up in their legacy business — perhaps explaining the desire to separate the two.

[Images: Bondart Photography/Shutterstock; Renault]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by subscribing to our newsletter.

Get the latest TTAC e-Newsletter!

21 Comments on “Report: Renault Considering Separate EV Business, IPO for Assets...”


  • avatar
    Master Baiter

    Look out Tesla. The French are coming…

  • avatar
    CKNSLS Sierra SLT

    Master Baiter-
    I realize some don’t get much but this brand is all over Europe.

  • avatar

    French are coming, French are coming camouflaged as US and Asian EV makers. French invasion is coming across the pond.

    • 0 avatar
      pmirp1

      I am old enough to remember Renault Alliance. Then they made something called Eagle Premiere. May be it was pre Chrysler buying AMC, can’t remember. There were also nice looking Peugeots for a while (I think it was 405) and the hoods crack if you slam too hard.

      Yes the French came to these shores and left quickly.

      Still, the French make the best tires without a doubt (Michelins).

  • avatar
    ToolGuy

    It is a well-established concept in Strategery that you should *always* divide your forces. The underlying principle is Unconcentration of Force, which allows you to get your ass kicked more quickly (quicker resolution, less suspense, no drama — all undeniable advantages).

    If either of the new entities runs into issues, you should immediately divide forces again. (Eventually we could be at the Leather Seating vs. Cloth Seating business entity level. Since there is no shortage of leadership talent, you can see the wisdom of such a move.)

    Viewed from the opposite perspective, the ‘enemy’ (the competition) might have in mind a Divide and Conquer strategy. By proactively Dividing your own forces, you save zhem a step.

  • avatar
    MitchConner

    Every legacy manufacturer looks at Tesla’s valuation, compares it to their own, then thinks about throwing something at a wall because they think their shares are way undervalued.

    With execs holding boatloads of shares — they all want to hit the jackpot and are trying to figure out how to massively goose them.

    Personally, I wouldn’t break the company up or create a separate IPO. Too much overhead with separate sets of executives and expenses on stuff like attorneys and investment banks.

    I’d create a separate EV brand with a simple standalone dealer network backed by a corporate accounting system that tracks its operations and performance instead — then issue a tracking stock for it. That way you can shovel EV R&D into it along with a bunch of other costs to make the legacy business look good (as there are plenty of investors who ignore EV losses because it’s the future).

    However, executing on time and getting cars out the door is vital. Rivian and Lucid were thought to be slam dunks at the time of their IPOs. Then reality set in and their shares tanked. Nikola and that bunch in Ohio were always kind of shady — although Nikola faked enough hype to get a short term bump in their stock. I wouldn’t touch Nio because the Chinese government is too big of a wild card to mess with. It also looks the other way when Chinese companies screw western investors. There aren’t even any laws there to prosecute fraudulent stock activities outside of China. Inside China? You get a ticket to ride on the mobile execution van.

    Thing is Tesla floundered around for years before they struck gold with the S. Even after it took off and the X launched there were still a couple of near death experiences. Building massive businesses, especially when large scale manufacturing is involved, is hard. That said, even if you execute — you still need a little luck and magic to get consumers and investors to look at you the right way before access to the four comma club is granted.

  • avatar
    Waterloo

    So what happens to the ICE divisions of these companies in 2035 when most countries think (only think/hope/virtue signal, whatever) they are banning the sale of ICE cars? Who would want to hold their shares?

    • 0 avatar
      SCE to AUX

      Exactly.

      And your username overqualifies you to comment on Renault.

    • 0 avatar
      thegamper

      I like to think about it this way: having the EV mobility company allows the Electric offshoots of the mothership to raise silly amounts of capital. The EV offshoots could be held to the same price per earnings ratios of say companies like Tesla who haven’t been profitable in the past while miraculously maintaining share value and probably even growing market cap. The legacy companies get to remove massive R&D spend dragging down their bottom line, hence raising its share price.

      At some point in time, way down the road, what I see happening is a quick rinse bankruptcy like what they did with the US Automakers in 2008. In an EV future, the legacy company has severely reduced revenues, sinking profits if any at all, massive legacy costs and infrastructure spend…..all potentially gone in a bankruptcy if the EV arm takes off. Not only that, with a new EV arm, the new company can shed dealer networks, only offer franchises to the best run and profitable outfits, leaving the old contracts to wither on the vine and die or simply be discharged in a bankruptcy.

      I think it is a calculated way to $crew a lot of people down the line, maybe way down the line, and essentially come out clean on the other side. All about the Benjamins.

  • avatar
    FreedMike

    Rumor has it this new strategy is code-named “Maginot.”

    Just kidding. Probably a good idea to organize into EV and non-EV divisions – they really are different business types, and each division would be easy to spin off or sell.

  • avatar
    SCE to AUX

    “manufacturers believe they make a fortune turning vehicle owners into permanent renters”

    Maybe in the country of Europe, but in the US car ownership is a Constitutional right.

    Renault seems to have no plan, and announcing it that way is embarrassing. How can anyone have confidence in Renault’s leadership as they wring their hands?

    • 0 avatar
      MitchConner

      Leasing is the same thing and 25-30% of cars are already tripped that way.

      • 0 avatar
        SCE to AUX

        You have a point there, although leasing is often a second choice that is taken due to:

        1. high vehicle prices
        2. high maintenance costs in the future
        3. unease about EV tech or residual value

        I’d guess that most people who lease would rather buy, although some just like that new car feeling every 3 years and view the payment as a living expense.

      • 0 avatar
        FreedMike

        @Mitch:

        Wrong. If you lease, you still own the vehicle – it’s just a different financing method.

        @SCE:
        Choice 2 covers me. I love my VW, but I don’t want it on my hands once the warranty’s done. Hell, these days, I’d probably be reluctant to have ANYTHING on my hands post-warranty that isn’t a naturally-aspirated Corolla.

        • 0 avatar
          deanst

          “Wrong. If you lease, you still own the vehicle – it’s just a different financing method”

          It’s one thing to make a false statement, it’s another to arrogantly correct someone and be wrong. How are people so financially illiterate?

        • 0 avatar
          MitchConner

          @FreedMike: Yeah, but in the consumer’s mind it’s just a monthly payment until they have to turn the car back. They don’t really think they own it unless they decide to “buy” it once the initial term is up.

          So many businesses are all geeked out about subscription-based business models and payment plans. You can buy a pair of $150 basketball shoes with payments now. There’s no interest to the consumer — but the brand pays a commission. Good luck with that now that interest rates are going up. It’s all signs of a declining standard of living and people living beyond their means.

          The big bugaboo is subscription burnout among consumers. A lot of them cut the cord to save money on cable. Well, now they’re stuck paying 9 bucks a month because a show they really want to watch is only on Apple+ while the kids are crapping their pants for Disney+, etc., etc. so instead of one bill you now have 10 plus a high speed internet bill and a connected TV that can be a real pain the butt to get to work right.

          Will be interesting to see where the subscription model for autos goes. Personally, I think it’s a waste of time — but never underestimate the American public.

        • 0 avatar
          Art Vandelay

          When I leased I wasn’t paying for the vehicle ..I was paying to treat it like the 2-3 year rental it was and have it not be my problem when the warranty was up.

          They all ended up as CPO used cars BTW… something to think about

  • avatar
    SPPPP

    “… As I was sayeeeng, at ze end of ze day, we steel own ahl ze cahrs. Eeet is, how you say, like ze landownairs and ze sharecroppairs?”

    • 0 avatar
      Jeff S

      Leasing makes it easier for the manufacturers to sell more vehicles and also to make vehicles more obsolete in a shorter period of time. Government regulators would also benefit if more vehicles were leased because they are not kept as long forcing people to drive newer vehicles with more safety features and more efficient. Not saying I like this trend but I do see an advantage more for the manufacturers and the government even though it might not be as good for the consumer. Using the EV1 as an example the lessee could be forced to return a vehicle that they might want to buy. No more 10 year old or older vehicles.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • ToolGuy: Here’s a current production vehicle with two engines: https://s7d2.scene7.com/is/...
  • DenverMike: If they’re big fans of Rush, geeze Styx will blow their minds. Bring a big mop. They just don’t know...
  • DedBull: I would be curious to know what the average days in inventory is for new vehicles. Are sales down because...
  • Kendahl: Three major brands are up significantly from last year – Tesla, Genesis and Chrysler.
  • TheEndlessEnigma: These advertisements cloaked as articles are simply amazing.

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber