Renault will split the EV from the combustion unit, wants a partnership

PARIS – Renault has received several partnership proposals for the Combustion Engine unit, which it plans to build side by side with a dedicated electric car and software, two sources familiar with the matter said.

Renault plans to separate its electric and conventional car businesses, creating two companies to manage the transition to fossil-free vehicles.

“The group has already demanded a partnership for its internal combustion engine unit,” a source said.

By bringing in combustion engine partners, Renault aims to raise funds for investments in electric vehicles, a technology that was pioneered with Nissan and Mitsubishi, but has now been embraced by genuine players like Tesla.

Renault wants to retain the majority ownership of its electrical division, which will employ about 10,000 people and which could be share-listed through an IPO in the second half of 2023.

However, it will only be a reference shareholder, not the controlling shareholder of the combustion engine unit, whose staff levels will be similar, two other sources familiar with the plan said.

A source said that a 40% stake in Renault could hang.

Renault declined to comment.

On a capital market day this autumn the carmaker will determine its plans for its electric arm located in France and the combustion unit headquartered abroad.

The entity will include factories manufacturing engines and gearboxes for petrol and hybrid vehicles in Spain, Portugal, Turkey, Romania and Latin America.

Among the potential partners in its combustion engine business, CEO Luca de Mio Nissan in April, mentioned other automotive groups and long-term investors.

De Mio will travel to Japan next month to discuss possible Japanese participation in its electric and combustion engine projects.

Renault is undergoing a major restructuring aimed at recovering its finances and recently signed partnerships outside of its historic alliances with Nissan, Mitsubishi and Mercedes, as well as China’s Gili Automobile Holdings.

This month it sold 34% of its South Korean unit to Gili, the owner of a Volvo car and a shareholder of Mercedes.

Along with Gili, Renault plans to build a hybrid car that will be assembled at its plant in Busan, South Korea.

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