Renault will pitch investors about its planned green revamp with two spin offs based on the customers’ worries about climate change.
Renault, a French auto manufacturer will pitch investors about its planned green revamp with two spin-offs: a new electric vehicle unit and a subsidiary for thermal and hybrid assets on Tuesday.
It is expected that the electric vehicle market grow rapidly concerning the customers’ worries about climate change thereby putting pressure on manufacturers to produce less polluting products.
The European Union (EU) agreed the previous month to phase out new CO2-emitting vehicles by 2035, a move that is expected to accelerate the manufacture of electric prototypes on the continent.
Renault is expected to outline its green transformation at an investor day in Paris on Tuesday.
Ampere is the flagship division of the carmaker’s reorganization. An expected split-off will make electric automobiles in the north and employ about 10,000 people in France.
Renault would remain the majority shareholder although it plans to invite investment in Ampere.
In addition to this, it plans to merge its technological, manufacturing and research and development activities for its hybrid and internal combustion vehicles in a subsidiary called “Horse”. It is expected that the “Horse” to employ an estimated 19,000 people across Europe, China and South America.
Geely, a Chinese carmaker is being considered for a stake in the company.
Renault’s CEO, Luca De Meo, reportedly claimed that the company is creating an inventive, adaptable organisation to handle our time’s rapid technological advancement and volatility.
The enthusiasm of investors in Renault’s turnaround was evident on Monday, as the company’s shares increased 3.77 per cent on the Paris Stock Exchange.
In 2020, the company suffered a historic loss and its recovery was hampered by its exit from Russia and Moscow’s invasion of Ukraine.
Traditional automakers are worthless in comparison to emerging electric vehicle specialists like Elon Musk’s Tesla or the Chinese company BYD.
According to the 2020 goals, the company still needs significant investment to advance its electric transformation.
Similar efforts have been made by US automotive giant Ford, which earlier this year announced the launch of the Ford Model E.
The number of hybrids and electric vehicle registrations for Renault in Europe during the first nine months of 2022 increased by 12 per cent from the same period last year to 38 per cent. The sales of Renault’s conventional internal combustion vehicles are falling.
Traditional internal combustion vehicle sales at Renault are declining. Hybrid and electric car registrations in Europe during the first nine months of 2022 accounted for 38 per cent of the brand’s total registrations, a rise of 12 per cent year over year.