Renault's New Ampere Division Will Challenge Tesla in Europe, Here's the Plan

Renault wants to stop Tesla from conquering Europe, even though the American brand filled the Old Continent with Model Ys. The crossover SUV rules over the pond and is set to become this year's best-selling passenger vehicle. Thus, the French automaker is gearing up for a tough mission. It's not easy to take on the world's most valuable automaker. But it's not impossible!

However, it's not just Tesla that European carmakers must worry about. Chinese brands are also on the rise, and they fulfill the safety standards set forth by the EU and other countries on the Old Continent. Couple that with attractive price points, and legacy brands quickly realize that the playing field is more complex than ever.

Besides increased competition from America and Asia, European automakers must also come up with ways to convince existing customers that it's worth sticking with them as the journey to complete electrification gets increasingly serious. Behind closed doors, these brands must also find the right partners and create shorter supply chains that support green goals.

Fortunately for Renault, it appears that it might have figured it all out. The French automaker admits that car making has become an Olympic sport as of late, which is a clear sign that manufacturing simpler autos based on a skateboard chassis isn't the piece of cake many considered it to be. As one of Europe's most important automakers, Renault pushes forward with a different strategy.

Figuring out the correct way forward

A great first step for the French auto brand is its alliance with Nissan and Mitsubishi – the partnership goes forth. The three companies were at a crossroads a few months ago. That renewed friendship enables access to more resources and eases access to various other markets.

The second step in Renault's strategy is establishing a brand-new company: Ampere. The entity will see that the French brand's goal of manufacturing software-defined zero-emission vehicles will see the light of day.

Ampere is a completely separate entity that focuses on software and all-electric vehicles. That's everything it'll do, which indicates that Tesla's way of doing business in the automotive sector has left quite a mark on legacy players.

Ampere is led by Renault's CEO, who believes there's no coming back to fossil fuel-hungry vehicles. The new company, however, will have a different workflow. Software engineers sit at its core, and everything they make will be open source. Renault believes that's the proper way forward and is confident that other developers can contribute without asking for a salary or reimbursement.

Keep in mind that one of every 10 vehicles sold in Europe is a Renault, and the statistic includes fleet customers, too. So, all this is a very important move that could put rivals like Stellantis' Citroen and Peugeot on notice.

Computing power, magnets, and wheels

Ampere will initially focus on B- (subcompact) and C-segment (small family) cars, which means hatchbacks and sedans get the spotlight. It also shows that Renault is playing this software-first approach a bit safer than we expected. Crossovers and SUVs are extremely popular; the new company isn't touching them yet.

Still, Ampere believes cloud computing will make cars cheaper because you won't have to deal with a ton of internal storage, many onboard computers, and auxiliaries. A 5G connection will help turn small EVs into smartphones on wheels, something that Tesla showed to be possible. Over-the-air updates are paramount for cars that can be easily upgraded.

Ampere will have 1,800 software and system engineers. Many come from Intel and represent nearly half the company's engineering workforce. That's a good sign for the future of Renault. These employees must know what they're doing, and they could help the new entity provide the French auto brand with that much-needed bleeding-edge advantage.

But it's not just snagging the right workers that makes Ampere a threat. Qualcomm is a shareholder! The chipmaker wants to create a digital chassis that can be sold to other brands. It also plans on offering on-demand services with Ampere.

Ampere and Qualcomm will bring their first vehicle with 5G connectivity in 2026. It'll have access to Google's Play digital market, underlining that downloadable content will play a major role soon enough. But that's not all. Ampere cars stand to get all the latest updates, which customers can easily install as they do with their smartphones.

Decisions

Ampere won't invest too much in Level 3 autonomous driving technology but will offer better assistance systems for those willing to pay more. As standard, Renault's division aims to offer "Level 2+" advanced driver-assistance systems through its "Safety Coach" suite. That's a great idea because it allows the company to focus on what matters. If autonomous driving becomes essential to sell a car to a retail customer, the brand can just license Tesla's FSD or Mercedes-Benz's Drive Pilot and call it a day.

Ampere aims to make Renault's fully electrified models up to 40% cheaper by 2028, but it's unclear if the customer will see that discount. The brand emphasized that its profit margins would grow considerably as the move to an all-electric lineup consolidates. The French are bent on "democratizing EVs." We expect them to keep this promise because more and more people look forward to cheaper cars that can be charged for cheap at home.

Ampere will also provide Alpine, Dacia, Nissan, and Mitsubishi with electrification and software solutions.

Renault also revealed that the zero-emission hot hatch Renault 5 will cost €25,000 ($27,103) with VAT included. It'll have a maximum range of 400 km (249 mi) and some artificial intelligence features. We'll see it in production form at the Geneva Motor Show in February. Renault will open the pre-order process after the official introduction.

Finally, the French talk a tough game, and the official presentation included a couple of digs at Tesla. However, the road ahead is bumpy, and they really must stick to a clear strategy if they don't want to lose more market share. America and Asia aren't sleeping.