Mitsubishi commits to Ampere

Japan’s Mitsubishi will invest up to €200mn ($213mn) in Ampere, the BEV and software firm being spun out of France’s Renault. And it could lead to more BEVs being rolled out, albeit there may be concerns over whether these ‘new’ launches will be more than rebadging exercises.  

Mitsubishi and fellow Japanese OEM Nissan, which is also committed to investing in Ampere, are members of the Renault–Nissan–Mitsubishi Alliance. California software company Qualcomm will be another Ampere partner.

As a first step in the collaboration, Ampere will supply a BEV to Mitsubishi for sale in the European market. And there could be more to come.

“You have two ways of making synergies,” says Renault CFO Thierry Pieton. “One is trying to squeeze a bit more from suppliers.”

By way of example, he means leveraging the fact that alliance members are buying the same part for different models. But that is “really hard”, says the finance chief.

“Or you can say, we are going to design, manufacture and source a car for both companies in the same place. The benefit that you get from having the project done in common from the design phase through manufacturing is way higher than the synergies that you get from trying to squeeze a bit more volume from the suppliers, especially in an industry that is getting more and more hi-tech, more ESG-conscious, and where you need to have a network of suppliers that is pretty close to you,” Pieton continues.

“From my perspective, the name of the game becomes how do we maximize the number of projects that we do together. We now have Alliance operating boards every second week. And most of what we talk about is the projects that we are going to do together. We will do more projects going forward and those will come with significant benefits for us. More to come on that topic,” he concludes.

But the question will be whether the BEVs Ampere might produce for its investor brands will offer any genuine difference to Renault’s planned launches. Pieton references the Mitsubishi ASX and Colt ICE/hybrids as evidence of Alliance collaboration. Reviews have, though, slammed the two ‘new’ models as nothing more than rebadges of the Renault Captur and Clio, rather than products in their own right.  

Coming soon

Ampere is set to debut as an independent company on 1 November. “What we are doing is separating Ampere so that we have people that work on EV all day, and we are really starting to see the benefits,” Pieton says.

“The IPO is taking that accountability and that responsibility of the management team of Ampere to the maximum level. It is one thing to be a business unit in a group and to be accountable for a set of financials — it is another thing to be a fully independent, publicly listed company with the scrutiny of [equity analysts], of shareholders, of a separate board.”

It is also about bringing along shareholders who want to leave ICE firmly behind. “It appeals to different categories of investors — people who are buying more the growth story of Ampère, the technology story,” Pieton suggests.

“If you look at the partnerships that we are building in Ampere today, Qualcomm would never have invested in Renault. The fact that it invests in Ampere shows the attractiveness that we are bringing to new types of investors.”

And Renault is unfazed by bringing in partners that reduce its control over Ampere. “It is a question of, do you want to own 100pc of something that is successful, or do you want to own 80pc of something that is incredibly successful?” the finance chief explains.

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Renault is “comfortable that giving Ampere all the chances, giving it the right capital, giving it the means to accelerate its product development and its cost-out activities, will make it incrementally more successful than if we had kept 100pc”, according to Pieton. “Ultimately it will return more cash to the group and more profit, etc. If we were not convinced that that is going to be the case, we would not do it,” he concludes.

And he also stresses the unique aspect of the spin-off, contrasting its with the recent IPO of German luxury brand Porsche from VW. “You have a franchise with Porsche that is already incredibly successful,” Pieton says.

“I am sure it is going to continue to grow, but off a very large base. Ampere, realistically, is kind of a start-up."

Cutting costs

One of Ampere’s key focuses will be to reduce EV production costs by 40pc. “This improvement will be continuous, and the benefits will materialise on vehicles in production and in upcoming launches,” Pieton continues.

The existing Renault Megane E-Tech BEV will transfer over as Ampere’s first vehicle, and Renault remains bullish about the model. “Megane E-Tech is still the number one EV of its segment in France in the third quarter and accounts for 2.2pc of the BEV market in Europe,” says Pieton.

“It remains a conquest product — with around 60pc of our clients which are new to the Renault brand.” The firm has sold 35,000 units here, of which 70pc are high trim versions and over 80pc are “equipped with the most powerful powertrain”. And Pieton notes that the car’s residual value has risen by two points since the beginning of the year.

It will be followed by the Renault Scenic BEV, which should arrive towards the end of the first quarter of next year. Scenic promises “best-in-class range” of up to 625km on a WLTP basis, according to Pieton.

“It is well positioned from a pricing perspective, which — with an entry price at c.€40,000 — is less expensive than key competitors, and already has a total cost of ownership on par with hybrid cars,” the finance chief continues.

The new Renault 5 BEV is slated for launch late in the third quarter of 2024, with the Alpine A290 hot hatch version following “very late in the year”, according to Pieton.