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The Renault boss said the company’s new electric car unit could fetch as much as 10 billion euros in an initial public offering when it goes public in the first half of next year, criticizing the unrealistic valuations of recently listed EV start-ups.
Luca de Meo also warned that the European auto industry is being held back by overly cautious investors in the region, as mainstream automakers struggle to match what he sees as ridiculous valuations being offered to loss-making electric car startups by U.S. investors. compete.
The French automaker is spinning off its electric vehicle and software unit into a separate unit called Ampere, with plans for a European IPO in the first half of 2024.
While Renault has yet to confirm its pricing target for the unit, de Meo told the Financial Times at the Munich motor show that the business could be worth “eight, nine, $10 billion.” [euros]” when it is listed.
Polestar, the electric car brand controlled by Volvo and China’s Geely, was valued at $21 billion when it went public last year. Vietnam’s VinFast went public earlier this year at a valuation of $23 billion. However, some analysts valued the Ampere business at just €5 billion, while others questioned the need to spin off the business.
“If European investors care about the future of Europe, they’d better put their money into it rather than put a question mark on it,” De Meo said.
“I don’t know what European investors are doing, but if they want to protect Europe [they should back] Someone with a project like this has the courage to create a real, comprehensive response to the challenges that the Chinese and Americans are throwing at us. “
The IPOs of Polestar and VinFast involved mergers with special purpose acquisition companies, allowing the companies to issue shares with less scrutiny than a traditional stock market listing. While Nasdaq-listed Polestar has fallen to just under $7 billion in market value, VinFast, also listed on Nasdaq, surged to $190 billion after its IPO last month and is now worth about $68 billion .
“Look at the valuations of European companies,” De Meo added. Referring to BMW’s market capitalization of 62 billion euros, he asked: “Do you think VinFast is worth more than BMW? Let’s be serious.”
The Ampere deal is part of an overhaul by de Meo, who became chief executive in 2020, that includes the automaker’s divestment of its engine business in partnership with China’s Geely and Saudi Arabia’s Aramco.
De Meo said breaking up the units was crucial because building electric cars is a “different sport” than conventional cars. France-listed Renault has a market capitalization of just 11 billion euros, roughly equal to the value of its stake in Nissan and the value of the banks that finance car purchases, he added.
He added that “I have nothing to lose” by rolling out the EV unit.
