Renault bets on re-born Twingo to sell electric car for under €20,000

The new Twingo will be developed in two years

Renault’s pitch showed a “highly impressive business”, Bernstein analysts led by Daniel Roeska said, adding that the new Twingo provides class-leading battery efficiency at a lower price than any of its peers.

Renault will rejuvenate the Twingo for the electric era as part of broader efforts to show its electric vehicle business can quickly bring new plug-in models to market.

The French carmaker is now embarking on another big gamble 125 years after its launch, reckoning it can achieve something that’s largely eluded the industry: Build affordable electric vehicles and make money on them.

The redesigned city car, presented at an investor event this week, will be sold from 2026 for less than €20,000, putting Renault in contention to produce affordable electric cars in Europe. Chinese manufacturers are expanding sales in Europe, with consumers struggling with a cost-of-living crisis. 

The new Twingo—which takes a popular design of the 1990s into the electric age—will be developed in two years, enabling Renault’s electric vehicle, or EV, business Ampere “to democratise EVs in Europe”, chief executive Luca de Meo said at the event. “We want to make EVs accessible and profitable in this part of the world.”

Investors have been sceptical about Renault’s capacity to bring cheap electric vehicles to market quickly, which has cast a pall on Mr de Meo’s ambition to list Ampere on the stock market in April or May of next year. The company initially wanted to pull off an initial public offering this year and pushed back those plans. 

CLIMATE & SUSTAINABILITY HUB

Tesla has long talked about, but hasn’t followed through on, building an inexpensive model, while Volkswagen, which is readying an under-€25,000 electric car for European markets in 2025, has had to lay off temporary workers and cut shifts because demand for its electric cars has fallen short of expectations.

The one major carmaker making good money off electric cars is China’s Byd, and it’s unclear whether its cheapest fully electric models are profitable. 

Renault’s pitch showed a “highly impressive business”, Bernstein analysts led by Daniel Roeska said, adding that the new Twingo provides class-leading battery efficiency at a lower price than any of its peers. “But we continue to question the need for the IPO.” 

The French carmaker also will introduce a much-anticipated Renault 5—another design classic—priced at €25,000 next year, as it tries to counter plans by Stellantis to take a share of the electric car market in Europe with new models such as Citroën’s recently unveiled electric ë-C3, which will start at €23,300.

UBS analysts re-affirmed their bearish view on the IPO and estimated Ampere’s valuation could be as low as €3bn. Although Ampere’s plan is well-framed, there’s not enough evidence yet that new electric vehicles priced between €20,000 and €25,000 can be successful and profitable, analyst David Lesne wrote. 

Renault will generate €2.5bn in cash this year, more than ever before, Renault chief financial officer Thierry Pieton said at the Ampere event. This will give Renault plenty of flexibility on the timing of an IPO for Ampere, he added. 

Bloomberg