Specialist
Former Manager at Renault-Nissan-Mitsubishi Alliance
Agenda
- Volume expectations for Ampere and EV product pipeline review
- Renault’s (EPA: RNO) EV strategies – BEV (battery EV) and PHEV (plug-in hybrid EV) uptake expectations and platform competitiveness
- Renault’s software division review and monetisation opportunities
- Benefits and challenges associated with potential IPO
Questions
1.
What were your initial thoughts on the decision to separate the EV and software unit, now called Ampere? What’s the likely rationale behind such a move?
2.
We discussed some of the advantages of Renault IPO-ing and separating and running the EV and Software businesses separately. What challenges could come up?
3.
Does the fact that Nissan plans to invest in Ampere, as far as we understand, alleviate some of the challenges of the IP separation, given it will ultimately be a shareholder in Ampere?
4.
You mentioned the vehicle targets that Renault has set for Ampere. I think it plans to have six models and one million vehicles by 2031. How realistic is this volume ramp-up?
5.
I think the models that Ampere plans to develop will be positioned in the B segment and the C segment – two models in the B segment and four in the C segment – by 2030. Are those the right segments to be targeting?
6.
With the models we discussed, Renault claims this will address about 80% of the EV profit pool in Europe. How do we get to that number and how realistic is this?
7.
You mentioned Ampere’s profitability targets. The company expects to break even by 2025 and to reach 10% profitability in 2030. That seems quite ambitious. How realistic is it, and what are the drivers behind it? 10% operating margin is roughly on par with the likes of BMW and premium German OEMs.
8.
You mentioned the macro environment isn’t very encouraging at the moment, and Renault is looking to IPO, I think, at the end of 2023. How dependent on a successful IPO is Ampere if it’s going to approach the targets? In the event that the IPO has to be deferred due to market conditions, can the company still work towards those objectives and financial targets?
9.
There are already several partners involved in Ampere from Nissan, Qualcomm and Google. They might not commit eventually, but should they commit, what would an IPO bring? If there are already so many interested partners, presumably that investment will be there. What is left to IPO if Renault owns more than 50%?
10.
Speaking of the production plant, Ampere is set to produce in Europe and is planning to build what sounds like a resilient supply chain, with 80% of suppliers less than 300km away and two-thirds of customers in the around 1,000km range. How important is this in the context of the last two years, which have been filled with supply chain disruptions?
11.
On the flip side, energy costs have been higher in Europe in 2022, and one can expect them to be higher for quite some time. How would this affect Ampere’s ability to make competitive BEVs [battery EVs] and competitive batteries in Europe with energy costs that are going to be perhaps multiples of what they are in other regions?
12.
Another part of Ampere that you mentioned as very important is the software side, and Renault is partnered with Qualcomm there for the processors, with Google to build the car OS [operating system] and with both to help build the SDV [software-defined vehicle]. What do you see as the key challenges associated with this shift towards SDV, particularly for a legacy OEM, or perhaps would you classify Ampere as a legacy OEM should the IPO happen?
13.
On that point of the OS, how do you assess the decision to partner as opposed to develop in-house, and what are your thoughts on the decision to use an open-source OS? How does that affect the monetisation opportunities?
14.
How much are customers willing to pay for over-the-air software updates and add-ons? What’s the potential revenue contribution for Ampere?
15.
You mentioned the automotive companies being service providers, they’re not used to this, and it seems as if Renault, with Ampere as well, is trying to move more towards a service provider. It speaks about vehicle life-cycle management, and wants to talk about the second life of the battery as well, for example, in EVs. How does the development of an SDV help Ampere-Renault in the vehicle life-cycle management and therefore to extract more value from the customer over the lifetime of the vehicle?
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