A Renault Scenic electric vehicle (EV) at the Munich Motor Show (IAA) in Munich, Germany, on Tuesday, Sept. 5, 2023.
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Shares of French car maker Renault jumped 5% in early deals on Tuesday, after the company canceled plans to publicly list its new electric vehicle and software business.
Renault said Monday that it would no longer hold an initial public offering of its Ampere unit, which chief executive Luca de Meo had previously positioned as a 10 billion euro ($10.8 billion) rival to Tesla and Chinese EV makers, according to the Financial Times.
Renault’s share price rose 5.13% at the market open Tuesday before dipping to trade up 1.7% by 8:30 a.m. London time.
De Meo originally announced plans to take Ampere public in 2022, as part of a wider strategy to overhaul the automaker and capitalize on the growing EV market. Demand for electric vehicles has since cooled, prompting the company to say in late 2023 that it would not move ahead with the plans if the valuation was too low.
De Meo said Monday that “market conditions” and the increased profitability of the wider business made the listing untenable.
He also pointed to a slowdown in EV sales in Europe, but insisted that the electric market would remain “dominant” in the region due to its decarbonization regulations.
Elsewhere, Volkswagen on Tuesday said that a public listing of its battery unit remains a “tangible option,” following reports that the company may defer a public listing on the back of weaker market demand.
The German auto giant said that it is standing by its financing plans for its PowerCo business while assessing “investor readiness” from 2024 and onward.
It comes after Bloomberg reported that Volkswagen was pushing back plans to seek outside investors for its battery unit, raising doubts that it can produce its own batteries at scale.
“The interest we see from investors remains high. An IPO is a tangible option in the future,” Volkswagen said in a statement, while also noting, “We have the expertise and the means to fund such an important entity within the Volkswagen Group.”
The company also acknowledged a shift in the EV “market environment,” but insisted that PowerCo remains an “important pillar of the VW battery strategy.
“The market environment has changed dynamically in recent years,” it said. “Capacities are being built up worldwide, ramp-up of full-electric vehicles is steady but not as steep as expected and raw material prices are showing significant fluctuations.”
PowerCo said that it remains “fully on track to become a global battery player,” and added that it is currently building up three giga-factories in Germany, Spain and Canada, with production set to start in 2025.
Volkswagen shares fell around 1% in early deals before rebound slightly to trade down 0.5% by 9:45 a.m. London time.