What last month was considered as a possibility within Renault’s future plans, especially after its exit from the Russian market, seems get closer and closer. The French group has confirmed that it is reviewing the strategy proposal for the spin-off of its electric car business as a separate entity and has provided some details about the consequences of that decision. Specifically, I would create a company based in France that would be dedicated to development, production and distribution of electric vehicles and their software.
At the beginning of April of this year, several senior Renault managers, including CEO Luca de Meo and financial director Thierry Pieton, had presented a plan that included this split to analysts. The new, fully autonomous entity would be based on a business model adapted to the specificities of electric cars.
Among its functionalities would be the ability to make partnerships focused on the development of new technologies and services, according to Renault in its statement. In turn, Renault is also investigating the possibility of grouping its activities related to hybrid and combustion cars in a separate unit that would have its headquarters outside France. Between both companies they would add around 10,000 employees in 2023.
Although it has not been confirmed by the French group, it is likely that both companies will remain as members of the Renault-Nissan-Mitsubishi alliance, fitting into the model devised for her. “The aim of these strategic considerations is to tailor each technology, drawing on the strengths and experience of the group in its various markets and within the alliance,” writes Renault.
The move is primarily aimed at strengthening the group’s electric car business, with an eye toward making Renault a fully electric brand in Europe by 2030. The condition that the new vehicle and software company be located in France comes given because the French state has a 15% stake in the shareholding of the Renault Group. Furthermore, it is explicitly stated that the combustion engine division must be located outside of France. This would also give the electronics division access to Renault’s industrial resources in France, such as the ElectriCity electric mobility industry cluster, an industrial hub that brings together the Douai, Maubeuge and Ruitz factories with the aim of producing 400,000 electric vehicles. per year until 2025.
As part of its Renaulution strategy, the manufacturer has begun to invest more in the supply chain of materials and components for electric vehicles. “The Renault Group has made the strategic decision to locate the production of the main components of the electric mobility value chain in France, demonstrating its determination to develop high-tech activities in high-potential markets and position itself as the European leader in the industry,” he says.
On the future of the internal combustion divisionRenault says that given the innovative capabilities and significant improvements in emission reduction of this type of vehicle, hybrids and plug-in hybrids “have significant long-term prospects and sales with great opportunities in Europe and international markets.” Therefore, it is likely that powertrain plants will be added to this division in Spain, Portugal, Turkey, Romania, Brazil, Chile and Argentinaas well as the corresponding development departments in Spain, Romania, Turkey and Brazil.
Finally, in the statement, Renault stresses that these ideas are still options that still need to be analyzed and discussed. All this is already being discussed with the workers’ representatives at group level and in the countries involved. “The development of these strategic considerations will continue through social dialogue,” he concludes.
Nissan, which owns 15% of Renault shares but does not have the right to vote, has just announced that it is too early to carry out this same operation within the Japanese manufacturer’s business structure, despite the fact that the French own a majority stake in the. Luca de Meo has already announced that he plans to meet with his executives in Japan to discuss the proposal.