Renault gives more details on its plan to split between thermal and electric activities

The French group is considering creating two new entities, one related to thermal, the other to electric. A large part of the French activities could integrate the pole dedicated to the electric and connected car.

Renault is making progress on its project to split between thermal and electric activities. This Thursday, in a press releasethe manufacturer gave more specific information on this project mentioned for the first time at the beginning of the year, in particular on the number of employees and the industrial sites included in the scope of reflection.

Like Ford, which will bring together its electrical activities under the name “Model e”, Renault announced on February 18 that it was considering separating its electrical and thermal activities “in order to strengthen their efficiency and performance. operational”.

But if the American manufacturer has split completely into two (even into three with a subsidiary devoted to utilities) with separate financial publications from next year, Renault is considering a slightly different form.

The French group intends to bring together certain activities in two new poles, electrical and connected on one side and thermal on the other, while keeping other activities within the parent company. The form of these new entities – financially independent or in the form of a subsidiary, or even listed separately for some – remains to be defined. “It is too early to say what profiles these entities will have, all the options are on the table”, explains a spokesperson.

“Electric Vehicles and Software”

In the press release released on Thursday, Renault is designing two new branches, each with around 10,000 employees. On the one hand, the autonomous “Electric Vehicles and Software” entity would include the French engineering activities (part of the Technocentre in Guyancourt, the Renault Software Lab, the Lardy site (Essonne) and other sites study in Île-de-France), industry (the three factories of its ElectriCity as well as that of Cléon, in the north), as well as the support functions linked to these activities.

On the other hand, the second entity would bring together its thermal and hybrid engine and transmission activities and technologies based outside France, with its Spanish, Portuguese, Turkish, Romanian, Brazilian and Chilean engine factories, as well as research centers in Spain, Romania, Turkey and Brazil.

“Renault Group is convinced that internal combustion, hybrid and plug-in hybrid vehicles benefit from significant long-term prospects and outlets in Europe but also on international markets,” reads the press release from the French group. Its “objective is to strengthen the potential of its technologies but also to contribute to the development of low-emission fuels, LPG… and thus create a world leader Powertrain (engines) serving the automotive industry”.

Of the group’s 157,000 employees worldwide in 2021 (including 45,000 in Russia, which the group has been seeking to leave since the start of the war in Ukraine, AFP recalls), some would not be affected by these two new entities. . Activities in China or Morocco or those related to chassis, for example, are not affected by these considerations.

A new impetus

Consultations on these studies “are carried out with all the functions concerned at group level and in the countries involved” and “the development of these strategic reflections will continue in the social dialogue”, underlined the group. AFP recalls that a first walkout had affected the Lardy technical center in February, the CGT union denouncing future relocations.

The challenge is clearly to give new impetus to Renault, shaken in recent years in particular by financial difficulties. Separating electrical activities, in particular by listing them separately, can make it possible to find financing to ensure a costly transition. It can also liberate the creation of teams by relieving the weight of more than a century of automotive creation, sometimes far from the agility of new actors.

A question remains underlying: will Renault join forces with others to create these two new entities? What will be the place of Nissan, the historical ally, or of Mitsubishi? Could an IPO of the electric vehicle entity see the arrival of new partners? This question will be on the agenda of an Alliance board of directors next Tuesday.

Nissan says it “supports” Renault’s initiative but is not ready for the time being to adopt a similar organization. “It’s too early, said its operational director Ashwani Gupta on Friday during a press briefing in Yokohama. We are concentrating on electric (…) but we must also remain focused on thermal, because today it represents 92% of our customers”.

The diamond brand is expected to present the conclusions of these reflections to investors in the fall of 2022.

Pauline Ducamp

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