Renault is contemplating splitting the company into two separately managed entities. The company also announced the possibility of triggering an IPO of its division manufacturing

electric vehicles

This announcement comes months after the automaker's operations and business were pegged back by the ongoing Russian invasion of Ukraine.

Legitimate sources

indicate that the move is a drastic move to ensure the company's growth, despite its financial setback by the crisis. If the move materializes, the company will separate its EV assets from its legacy internal combustion vehicles.

Additionally, Renault is also set to perform a company overhaul to remain competitive.

Renault set to split New Mobilize company from its legacy assets

Renault's top management announced in February that the car company is weighing the possibility of splitting the group into two separate entities.

According to

Bloomberg

, the France-based car manufacturer's New Mobility – the company managing its EVs – and Mobilize car-sharing division would be separated from its combustion-engine legacy assets.

It also indicated that it's contemplating an IPO of New Mobility for 2023. Renault has recorded losses since halting operations in Moscow – the company's second-largest market – due to sanctions over Russia's invasion of Ukraine.

Since Russia's military campaign started, the company's stocks have plummeted to 0.9%, while it has recorded a 24% loss.

The break-up means that the legacy assets would be entirely operated separately. Renault's CEO, Luca de Meo, remarked that a new partner would take over the company's legacy combustible-engine operations and combine its gas-powered autos with the assets of a prospective partner.

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An increased focus on EV assets and growth

Renault's decision to split not only enables it to mitigate the losses incurred due to sanctions but also raises the funds to accelerate the advancement of its EV technology.

The car manufacturer is also contemplating taking New Mobility public, saying the IPO in 2023. That will position Renault as a separate EV entity cut off from the current group in the form of an IPO.

The company's reorganization plan will see all its EV operations and technologies come together under one entity in France. Furthermore, it said that it's thinking of consolidating its operations and activities of ICE and hybrid engines and transmissions currently outside France. They will come together within a dedicated branch.

One analyst confirmed that all possible means to separate the ICE and hybrid assets are under consideration, citing the possibility of the 2023 IPO of the EV assets or establishing its legacy combustible-engine activities into a new joint venture.

Renault will emerge as a stand-alone EV company and establish its niche with its scheduled IPO.

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Is Renault the first company to split?

The EV revolution is drastically transforming the auto industry. New startups emerge almost every week while many long-standing car manufacturers are splitting their assets to revamp their EV operations and technologies.

Renault is not the first company to consider a split. According to a report by

CNBC

, Ford Motor Company also announced in March 2022 that it's performing a widespread reorganization to separate its electric vehicles EVs and EV tech from its internal combustion engine activities.

It plans to splurge about $50 billion to boost its EV development.

Unlike Renault, Ford plans to separate the two entities but maintains them in-house. Wall Street analysts say that's not enough to maximize the business opportunities. Instead, Ford and other legacy car manufacturers should spin off their EV operations to offer the value that most investors have been awarding most EV startups.

MORE: Ford Finally Killing Under-Performing SUV