Towards a next gen automotive company
The Renaulution strategic plan that Renault Group unveiled in January 2021 plots out an ambitious roadmap for transformation and kick-started a shift from volume to value. In advance of its initial objectives, the Group is now opening the third chapter of this plan, called Revolution.
Built on three phases, set in motion simultaneously, the Renaulution plan aims to restore competitiveness by:
- Improving function efficiency and adopting strict cost discipline;
- Harnessing the Group’s industrial assets and leadership in electric vehicles in Europe;
- Leveraging the Alliance’s technological expertise to boost efficiency;
- Taking data services, mobility services and energy services to the next level;
- Tapping into the most competitive and distinctive brands, for customers and markets, and to enhance profitability.
Renaulution: an initial assessment
The Renaulution is already delivering tangible results: the company is more profitable, more competitive and more efficient, its brands are shining brighter, and it is revamping its product line-up.
The Resurrection phase was completed ahead of schedule. The Group is profitable again:
>
5
%
Group operating margin
achieved 3 years in advance
~ €3
bn
Automotive free cash flow
achieved almost 1 year in advance
8-9
%
R&D Capex (% of revenue)
since 2021
We will reach our 2025 profitability target in 2022.
We will generate €2.7 billion by end-2022 and are well on track to meet our €3 billion target in 2023.
And we have set our R&D spend above 8%.
The Renovation phase has started and is standing on firm ground.
The Group is now organised by brand, and this new configuration is producing results: Renault, Dacia and Alpine are now strong independent business units, and the Group has created Mobilize to take on the new challenges facing mobility. This reorganisation was the first step to streamline the Group around consumers’ needs and to transfer the focus to performance.
At the same time, we will market the best line-up in these past 30 years, with 25 launches from 2022 to 2025. This new range is designed to position the Group on the most profitable market segments while it aims for the smallest environmental footprint in its sector.
Now we are embarking on the Revolution phase: our full transformation to tap into all the growth opportunities arising from the automotive sector’s reshuffle. Our ambition is to become a Next Gen automotive company.
Now, Revolution
New playing fields
The EV & digital revolutions, the shift from selling cars to selling mobility services, and the urge to make our industry sustainable, are radically reshaping the automotive sector.
All these shakeups are opening doors into new playing fields for Renault Group.
Specialisation and horizontal integration
To turn these challenges into growth opportunities, the Group is speeding up its transformation to excel in all the new value chains – technology, industry, services, circular economy and so forth.
To do this, we are setting up specialist teams. The goal is to concentrate their talents, expertise and energy in each field, and thereby move into the lead.
We team up, whenever we can, with the best players in the field to invest together, build together, expand the possibilities for innovation and share risks.
In other words, we are building open ecosystems to take on growing portions of these new value chains.
Our determination is to prepare the company for the future challenges and opportunities generated by the transformation of our industry. After having executed one of the fastest and unexpected recovery plans, after having prepared the company for growth by securing the development of the best product line-up in decades, we intend to position ourselves faster and stronger than competition on the new automotive value chains: EV, software, new mobility and circular economy. All this is one of the most progressive re-engineering projects of the recent years in our industry, a Revolution in its kind.
CEO of Renault Group
5 value chains, 5 focused businesses
We know that our organisation needs nothing short of a full transformation. And it has started.
It involves creating two new entities (Ampere and Power) alongside the three existing ones (Alpine, Mobilize and The Future Is NEUTRAL). They are all centred around intrinsically profitable business operations, open to outside investment and built around a consistent array of technologies. They all have autonomous governance bodies and clear objectives. They are:
- Power, the traditional core business of Renault Group will continue to develop innovative low emissions ICE & hybrid vehicles under the Renault, Dacia and Renault LCV brands;
- Ampere, the first EV & Software pure player born from an OEM disruption;
- Alpine, a high-end zero-emission global brand with a racing pedigree;
- Mobilize, built around a leading financial services company to enter the market of new mobility, energy and data-based services;
- The Future Is NEUTRAL, the first 360° circular economy company in the automotive industry from closed loop in materials to battery recycling.
Renault Group, a team of teams
Our transformation has deep roots and a solid trunk, Renault Group, which will continue to play this role in the new system.
It is a large technological and industrial group, building a portfolio of standard-setting brands and business units in complementary fields – combustion and hybrid powertrains, electricity and software, mobility services, the circular economy – with a view to becoming a new-generation automotive company.
We want this entirely digital company to be highly efficient and fully focused on the ventures that make the most strategic sense and create the most value:
- Setting the medium- and long-term strategic course, and the ESG trajectory;
- Supporting all the entities and business;
- Delivering economies of scale and synergies;
- Encouraging innovation and transforming skills;
- Ensuring consistency across the board, including the Alliance.
The example of the metaverse, the company's digital twin
We are setting up a global digital twin for our company, in the metaverse, to optimise coordination in the Group’s activities while lowering costs.
We have invested in IT platforms providing a 360-degree view, encompassing engineering, purchasing, logistics, manufacturing, sales and so forth. In other words, we have switched to a management 4.0 model.
It will for instance enable the Group to make decisions faster, remove silos and cut some admin costs.
We teamed up with several partner companies, including Dassault Système, Google and Tekion, to roll out this platform.
Our five focused businesses
Power 01
Low emissions ICE & hybrid solutions.
As the world gravitates towards carbon neutrality, we will need to be able to address a market centred around two large clusters:
- Electric mobility and software on one side;
- Hybrid and ICE technologies on the other.
ICE & Hybrid vehicles will still represent up to 50% of passenger cars sales worldwide even by 2040. Developing efficient technologies in that field remains key for the future of any Global OEM.
Based on this observation, we bring together within Power:
- ICE & hybrid passengers cars of the Renault brand;
- ICE & hybrid passenger cars of the Dacia brand;
- LCVs and the technology and service revolution afoot in this segment.
Furthermore, Renault Group & Geely will create a world leader for powertrains, in partnership with Geely, combining both companies’ technology assets, production capacity and R&D capabilities.
Renault, globally uplifted
Renault will be the first brand in our portfolio to become full EV electric, in Europe in 2030. But it will also be the last to remain ICE & Hybrid due to its international presence, especially in Latin America, India, South Korea, and North Africa where electrification trajectories will be slower.
To do this, Renault has a choice of full-hybrid and plug-in hybrid vehicles in its E-TECH range, which is growing non-stop. It already included Clio, Captur, Megane and Arkana. In 2022, it grew to encompass All-new Austral, which ushered in a new, more powerful, more efficient and more frugal full-hybrid version of the E-TECH system.
In all, Renault brand ICE and hybrid vehicles will continue its C-segment offensive and will grow by 20% its net revenue, while expanding its contribution margin by 30% between 2022 and 2030.
Dacia, a unique value proposition
Dacia is a brand that the Group wants to put at the forefront of the world’s transition to affordable low-emissions ICE and hybrid models.
As its business model is unrivalled, Dacia has few competitors and its profitability is in double-digit territory. Sandero, for instance, has been Europe’s best-selling car among private customers since 2017, and Dacia is one of the continent’s most popular brands. It is the only carmaker growing in Europe’s crisis-ridden automotive sector.
Dacia is already a champion in the B-segment and plans to invest heavily in the C-segment. It started with Jogger this year, Dacia Bigster will take up the baton and two other vehicles will follow. Meanwhile, Dacia will continue to reduce its costs and benefit from the plan to double production of the CMF-B worldwide platform to 2 million units by 2030.
Dacia will play its part in reinventing the combustion engine value chain on the Horse project, by developing revolutionary powertrains running on synthetic and other alternative fuels. It will also help smoothen the transition to electric vehicles in Europe by tendering affordable models.
LCV business unit: Revolution for the Pros
Renault Group’s LCV business relies on solid foundations with over 5 million vehicles in European car park, an ecosystem of over 600 dedicated Pro+ dealers, 4 plants and the most up-to-date line-up by 2026.
Renault LCV will develop two game changing projects to address a dynamic and changing market:
- HYVIA, Renault Group’s joint venture with Plug revolving around hydrogen mobility, pooling the first’s engineering and industrial assets with the second’s expertise in hydrogen. Hyvia aims for 30% of the hydrogen-powered LCV market by 2030, in Europe and a cumulated order intake of €1 billion by 2026.
- Also in 2026, a new generation of LCVs, FlexEVan, will appear. FlexEVan will be compact for urban use thanks to a specially designed EV platform. It will use the technology developed within Ampere for software-designed vehicles. It will be the first vehicle to benefit from the application of the software-defined vehicle technology at Renault Group, allowing notably for real-time, end-to-end operations monitoring and data-driven fleet management. FlexEVan will reduce the total lifecycle cost of usage for the clients by at least 30%, i.e. more than the price of the van. To support the development of FlexEVan, Renault Group intends to create Flexis, a joint venture, to share development costs and maximise customer coverage.
Renault Group and Geely: creating a world leader for powertrain technology
Renault Group and Geely will combine their technologies in a 50-50 entity to create a world-leading supplier of powertrain components.
This dedicated business will design, develop, produce, and sell all ICE and hybrid powertrain components and systems with state-of-the-art technologies, under the Renault and Dacia brand.
Through this partnership, Renault Group & Geely will join forces to offer their customers a complete portfolio of technologies for ICE & hybrid passengers cars and alternative fuels, while doubling doubling their market reach.
Nissan and Mitsubishi Motors - as members of the Alliance - will become customers of this new entity..
The project in 3 figures
19,000
Employees on 3 continents
5
R&D centers
17
Production plants
Ampere 02
A pure player in electric vehicles and software born from an OEM disruption.
Ampere will develop, manufacture and sell all-electric cars packed with cutting-edge software technology, under the Renault brand. It will bring the best of both worlds: know-how and assets from Renault Group with the focus and agility of an EV pure player.
Based in France, Ampere will be a full-fledged OEM with around 10,000 employees. As a tech company, Ampere will drive innovation with 3,500 engineers, half of them specialized in software.
Renault (Europe), all-electric
Ampere will be the key to boost the Renault brand and usher it into the new era of electric and connected vehicles.
It will provide the technology and organisation to turn Renault into an all-electric brand in Europe by 2030, and support Renault Group’s aim to achieve carbon neutrality in Europe by 2040 and worldwide by 2050.
Ampere will tender a revamped customer journey “tailor-made” for electro-mobility, and its first line-up will have 6 electric vehicle models: the B-segment with the new Renault 5 Electric and Renault 4 Electric, and the C-segment with Megane E-tech Electric, Scénic Electric and 2 other vehicles to be revealed.
Renault Group will remain Ampere’s majority shareholder.
As part of the strengthening of the partnership between the Renault-Nissan-Mitsubishi Alliance members, Nissan announced in February 2023 its intention to invest up to 15% in Ampere, with the aim to become a strategic investor and to accelerate new business opportunities in Europe.
Target:
1 million electric vehicles produced by the Renault brand by 2031.
1 million electric vehicles produced by the Renault brand by 2031.
Ampere’s vision and the 3 tech backbones to make it happen
#1: ElectriCity, a high-tech and top-competitive manufacturing footprint
ElectriCity started up in 2021 and is Europe’s most competitive and best performing electric vehicle production cluster. It encompasses the plants in Douai, Maubeuge and Ruitz, which have been active in northern France for more than 50 years. It also draws on mechanical expertise at the plant in Cléon to manufacture powertrains.
ElectriCity’s competitive edge comes from its comprehensive electric mobility ecosystem, which brings together research centres, universities, startups and suppliers with cutting-edge expertise.
Key figures:
- 480,000 electric vehicles a year by 2025
- 80% of suppliers within a 300 km radius
- Plants aiming for carbon neutrality in 2025.
#2: a European EV value chain
Ampere can rely on key partners in the electric vehicle value chain:
- Vulcan, Terrafame and Managem to supply raw materials. These partnerships cover almost two-thirds of the lithium we require for high-performance chemicals, 60% of our nickel and 55% of our cobalt. They all come from sources that comply with the requirements in our ESG policy;
- Verkor and Envision to manufacture batteries in France (gigafactories in Douai and Dunkirk);
- Minth for battery boxes;
- Valeo and Whylot for electric motors. Through this partnership, Ampere will notably become the first equipment supplier to mass-produce a 200 kW motor without rare-earth materials, by 2027;
- Vitesco Technologies and ST Electronics for power electronics.
We currently cover 30% of the electric vehicle value chain and are aiming for 80% by 2030. The fact that most of our supply chain is in Europe also contributes to our decarbonisation objectives.
#3: a breakthrough Software-Defined Vehicle (SDV) technology
By 2030, 40% of the car’s value generation will come from software in 2030, against 10% today.
Software-defined vehicles will evolve non-stop – and get better every day:
- Upgrading cars throughout their life cycle will increase their residual value.
- Our customers will remain connected to our after-sales systems throughout their vehicle’s life. This is a first in automotive history – and nothing short of a revolution.
- Software-defined vehicles are opening up new prospects: they will enable savings in R&D and generate new revenue streams, especially from new connected services.
The Group’s first entirely software-defined vehicle will be on roads in 2026, and be a Renault brand car. We are developing it with technology partners including Qualcomm and Google.
We teamed up with Qualcomm Technologies to co-develop high-performance computing platforms based on Snapdragon Digital® Chassis™ solutions for the Centralized Electronic Architecture. This includes System on Chip and low layers software in addition to features, in-car services and applications.
We teamed up with Google with whom the collaboration includes an Android-based platform for Software‑Defined Vehicle and cloud software to enable a SDV digital twin.
Alpine 03
A high-end zero-emission global brand with a racing pedigree.
After two years into the Renaulution plan, the Alpine brand is in a great place:
- Stepping into Formula 1 has boosted brand recognition;
- Its sales have doubled.
We have breathed new life into the brand.
Moving forward, Alpine is aiming to:
- Offer an all-electric line-up starting in 2026;
- Grow internationally, principally with its five upcoming cars: the new A110 and models in the B, C, D and E segments.
Alpine is striving for profitable and enduring growth with a one-of-a-kind business model: it operates as a standalone startup.
Its organisation is therefore agile, and it has its own in-house technological capabilities:
- Alpine has all the skills to develop its chassis as well as hybrid and electric power units;
- It has its own plant, the Manufacture Alpine Dieppe Jean Rédélé, which has unrivalled expertise in best-in-class highly customised vehicles.
Meanwhile, the Alpine F1 teams are focused on their goal: to be in a position to win the Formula 1 world title by 2026.
Mobilize 04
A brand dedicated to new mobility, energy and data platform services.
New mobility services are one of the main opportunities arising from the shakeup in the automotive sector.
The European market for financing, mobility and energy services is expected to double in value between 2022 and 2030. Mobilize is tasked with tapping into these opportunities.
The brand combines financial services, mobility services, energy services and data-based services in a one-stop shop to meet the needs of private customers, fleet operators and mobility companies.
The brand can count on a number of assets:
- Mobilize Financial Services is one of the best financial services providers on the market with 4 million of customers;
- A comprehensive and exclusive vehicle line-up;
- Support from the Software Republique to take on the challenges surrounding new kinds of mobility;
- The Group’s network, which will enable it to bundle maintenance fast tracks into its range of mobility services;
- Refactory, to give the vehicles more than one life and thereby maximise revenue throughout their life cycle.
What puts Mobilize in a class of its own is its focus on the service rather than the product. With its VaaS (Vehicle as a Service) model, Mobilize will generate three times more revenue during a vehicle’s life cycle than it would simply selling vehicles.
The Future Is NEUTRAL 05
The first 360° circular economy company in the automotive industry.
We see shrinking our environmental footprint as a lever to enhance performance in everything we do, everywhere.
This is what The Future Is NEUTRAL, the first company spanning the full circular economy value chain in the automotive sector, is all about: it helps all players in the industry move closer to resource neutrality by using more recycled materials to make new vehicles.
This new entity provides closed-loop recycling solutions at every stage in a vehicle’s life, across sourcing parts and raw materials to production and on to use and the end of the vehicle’s life.
From around 50% of value chain coverage today, The Future Is NEUTRAL aims to reach above 90% by 2030. It is set to become the European leader at industrial scale in the closed-loop automotive circular economy. It will service Renault Group as a well as the entire industry. In order to accelerate its development and strengthen its leadership, The Future Is NEUTRAL is opening up a minority of its capital to outside investors with the objective of to co-finance investments of around €500 million until 2030.
Objectives by 2030
>
10
%
Operating margin by 2030
>
~€3
Bn
Free cash-flow per year over 2026-2030
Up to
10
%
Employees shareholdings by 2030
