Renault Received Partnership Proposals For Planned ICE Unit: Report

While Renault aims to retain a majority ownership of its EV division after the IPO, it is looking for partners for the ICE business.

By: Dan Mihalascu

May 25, 2022 at 12:48pm ET

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Renault Group's intention to separate its electric vehicle division from its internal combustion engine unit was made official earlier this month when the automaker said the move was aimed at accelerating the transition to an all-electric future and supporting the fast-growing EV market.

As it turns out, Renault "has already received partnership demands" for the ICE unit it plans to create as a separate division from the one dedicated to EVs and software, one source familiar with the matter told Reuters. By attracting partners for its ICE business, Renault aims to free up funds to invest in EVs.

According to the report, the carmaker intends to retain majority ownership of its electric division, which will employ more than 10,000 people. The EV unit could be listed on the French stock exchange via an IPO in the second half of 2023.

In a May 12 press release, Renault said its electric arm would be based in France while the ICE unit would have its headquarters abroad. Renault plans to remain only a reference shareholder in the internal combustion engine division, not a controlling shareholder, two other sources said. One of them said the carmaker may end up keeping a 40% stake in the ICE business, which will have similar staff levels with the EV unit.

Gallery: Renault Megane E-Tech Electric at IAA 2021

The ICE entity will include factories producing engines and gearboxes for gasoline, diesel and hybrid cars in Spain, Portugal, Turkey, Romania, and Latin America. Renault is expected to make the plans official this autumn at a Capital Market Day.

In April, Renault Group CEO Luca de Meo mentioned Nissan, other automotive groups and long-term investors as potential partners for its combustion engine business. The executive is scheduled to travel to Japan next month to discuss potential Japanese participation in its electric and combustion engine businesses.

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As a reminder, Renault has a strategic alliance with Nissan and Mitsubishi as well as a partnership with Mercedes-Benz Group dating back to 2016.

More recently, the French carmaker signed partnerships with other companies, such as China's Geely Automobile Holdings. Earlier this month, Renault sold 34% of its South Korean unit to Geely, which owns Volvo Cars and is a shareholder in Mercedes. Renault and Geely plan to develop hybrid vehicles that will be made at the French carmaker's plant in Busan.