Renault has plans to separate electric vehicle and combustion engine businesses.
French automaker Renault has outlined a plan to carve out separate electric-vehicle and combustion-engine businesses and provided details of the possible overhaul just before meetings with its Japanese partners, as reported by Bloomberg.
The project was first proposed in February and it could take effect next year.
It was said that Renault will have an entity based in France and will employ about 10,000 people by 2023. This will be dedicated to the operations and development of electric vehicles and their software.
A second entity will be built to focus on internal combustion and hybrid powertrains. It will be based outside of France and will also employ around 10,000 people.
“This autonomous entity would have a business model adapted to the specificities of electric vehicles and would be able to forge partnerships in new technologies and services,” Renault said in its statement.
Renault’s revamp came after the automaker has struggled to compete in the declining European car market and prepared to take a mid-year financial hit by pulling out of Russia, which is the automaker’s second-biggest market before the war in Ukraine.
With Renault’s overhaul progressing, the role of its Japanese partners, Nissan and Mitsubishi, is still unclear. Top executives from the three companies will hold an in-person meeting in Japan next week.
On Thursday, Nissan Chief Operating Officer Ashwani Gupta said regarding the plan: “Let’s do the study with them and then we’ll make our opinion,” he told a conference organized by the Financial Times. “In the next 10 days, we should have a better understanding” of what Renault CEO Luca de Meo is trying to do.
Additionally, Renault said that it has started meetings with unions on the carveout plans. a process that can be fraught in France. “The aim of these strategic reflections is to adapt each technology, drawing on the group’s strengths and expertise in its various markets and within the Alliance,” the company said.
In an earlier report, Renault is reportedly considering to sell its Nissan stake to fund its EV transition.