Renault SA upgraded its full-year earnings guidance, thanks to strong sales momentum from some new models like the Austral crossover and lower costs, as the French company prepares for the initial public offering of its EV arm Ampere.

Group operating margin is expected between 7% and 8%, up from a previous goal of 6% or higher, Renault said Thursday. That’s higher than analysts expectations for a 6.2% operating margin this year.

Automotive operational free cash flow will be at or higher than €2.5 billion ($2.7 billion) for the year, compared with €2 billion or more previously, Renault said.

Renault is raising expectations at a time of slowing automotive markets, particularly in Europe, the company’s mainstay, where buyers are grappling with high inflation. For now, high order banks for most carmakers following years of supply-chain disruption are helping carmakers to bridge any slowdown in demand.

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While above-expectation sales of new models such as Austral and the Dacia Jogger are good news for Renault, investors are focusing on the performance of the fully electric Megane E-Tech, a cornerstone model for the company’s EV IPO.

Renault and other European carmakers have come under pressure this year after US rival Tesla Inc. aggressively cut prices, putting the Megane E-Tech in direct competition with Tesla’s Model Y, Europe’s top-selling car last quarter.

(Updates with analyst expectations in second paragraph)