Renault Looks to Separate Electric Vehicles’ Business

Renault has said that it might separate its electric vehicle vertical from the rest of the car making business. Renault informed that it might exercise the option of going for a public listing of the business in the second half of 2023.

Groupe Renault is a century old French carmaker and is currently 16^th largest automotive company in the world. Finance Chief of Renault, Thierry Piéton said that any plan of the company should have approval from Nissan which is the alliance partner. He held that Nissan is kept informed as Renault is charting out plans.

The key reason behind separating the electric vehicle business from the traditional combustion engine business is to stay in the competition. Renault too wants to catch up in the EV race with Tesla, Ford or Volkswagen. Recently, Ford announced that it will be separating the two businesses to streamline the growth of EV and maximize profits.

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It was reported earlier that the issue of separating the EV business was being discussed by top officials of Renault including CEO Luca de Meo and CFO Theirry Peiton. The Ukraine-Russia conflict has posed additional challenges like semiconductor shortage.

Renault’s Revenue Story

In the first quarter of this year, Renault had revenue better than anticipated. Higher margins and higher EV sales was able to offset the impact of the Ukraine-Russia conflict. The news that Renault could lower its stakes in Nissan has also pushed up its share prices by as much as 5 per cent. Renault said that when compared to the corresponding quarter of last year, revenues fell by 2.7 per cent.

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A month earlier, Renault announced that Moscow plant operations will be suspended soon and it’s also assessing options on its majority stake in Russia’s top carmaker Avtovaz. Renault EV and hybrid vehicles sales rose by 13 per cent. They make 36 per cent of the total sales.

Renault had informed that Renault will reduce its planned vehicles’ production by 3,00,000 vehicles in 2022 due to shortage of semiconductors in the world. Most of the cuts will take place in the first half of the year.