The Diamond brand was due to carry out the IPO of Ampere, its electric car and new mobility solutions subsidiary, during the first half of 2024. The cancellation illustrates the recent reluctance of manufacturers towards the financial markets.
Tesla’s surges on the stock market have allowed it, over recent years, to access essential capital to enable it to continue to invest and reduce the price of its models. A strategy that inspired many startups in the sector to make a place for themselves on the stock markets at all costs, even if the latter were still not profitable or had not yet started producing cars on a large scale.
At Renault, it was with Ampere, a new subsidiary for its electric cars, that the brand wanted to create a good image on the stock market and capitalize on market growth to reassure investors. An ambition finally revised, in 2024, while market conditions are no longer the same as those of the years of confinement or the rebound of tech stocks at the end of 2023. In a conference, his boss Luca de Meo confirmed the cancellation of the IPO and indicated that Renault will take care of the financing.
“I said cancel”announced the CEO of Renault, alongside its financial director Thierry Piéton, during an online event Monday evening. “The stock market conditions and the cash flow generated in recent months have led us to this decision”, he added. If it is true that profitability has increased on each of the sales of car manufacturers who have launched into electric vehicles, it is also good to admit that market conditions have deteriorated.
The announcement, which could have been received as a failure, was instead welcomed by investors as Renault shares fluctuated between 2 and 3% increase since the close on Monday evening.
The end of the Tesla model
The stock market success model that is Tesla illustrates the situation well. Since its 2021 highs, the stock has lost more than 53%. Over the last six months, its capitalization has lost 29%, to $592 billion, despite the fact that the American manufacturer has managed to be competitive in price, reach its highest production levels and offer a first successful restyling of its Model 3.
A performance close to that of Porsche, which despite its latest announcements of models such as the new 100% electric Macan, lost 28% on the stock market over six months. Within the Volkswagen group, the separation of Porsche in an action independent of the other brands of the group was also seen as a desire to seek capital with an action freed from the brakes of a group which does not only produce ultra models. -profitable.
Electric? A “non-bearing” market for the moment
For Luca de Meo, the current situation for electric cars on the stock market is not simply a coming of age and the end of double-digit growth. The man was more severe and then described the market as “non-carrying at the moment”. Despite seven models planned, including a rather accessible electric Scénic with more than 600 kilometers of autonomy, a new inexpensive Renault 5 and a Twingo for less than 20,000 euros, we will have to wait to hope to be able to highlight an activity in the new mobility and software solutions on the capital market.
To avoid a cold shower and regain investor confidence, the boss of Renault still described 2023 as the best year in 10 years (with more than 10.5 million registrations in Europe). What “self-finance sustainably”. See you on February 15 to find out more with the publication of the group’s annual results. An important event too since Renault will no longer include Nissan, which left the alliance in September 2023, and which was originally to be integrated into the Ampere project.
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