Renault benefits from electric car sales even as rivals cut prices

The electric car market is slower than the manufacturer anticipated two years ago

The Megane E-Tech. Renault hopes a string of 10 new product launches this year will help draw more customers.

Renault is benefiting from robust pricing and cost discipline amid continued demand for a range of models such as the electric Megane E-Tech, even as rivals suffer from a slower electric-vehicle market.

“We are sticking to a policy of stable prices,” chief financial officer Thierry Pieton said. “We have managed to lower costs by quite a bit — our new models come at a higher margin for us and at a lower price for our customers.” 

The manufacturer is betting that a string of 10 new product launches this year, including the €25,000 all-electric Renault 5, will help draw more customers at a time some bigger rivals like Volkswagen are struggling. In March, sales of fully-electric cars in Europe slumped 11% with higher interest rates, weaker economic growth and the phasing out of generous subsidies contributing to the downturn. The shares have gained more than 40% over the past year.

Pricing is encouraging and goes to show Renault’s “ability to offset currency headwinds”, Bernstein analyst Stephen Reitman wrote in a research note. Chief executive Luca de Meo earlier this year abandoned plans for the initial public offering of Renault’s software and electric vehicle, or EV, arm Ampere amid Tesla's price cuts and increased competition from Chinese manufacturers. 

“The EV market is a bit slower than what had been anticipated two years ago but it’s still growing,” Mr Pieton said. “There’s a switch to electrification, no question,” he said. 

Renault, which loosened ties with long-time Japanese partner Nissan last year, has been holding talks with rivals including Volkswagen about sharing the cost of developing a platform for more affordable electric cars. Renault remains open to a partnership for the platform but has no news on the talks, Mr Pieton said. The car also is pooling its combustion-engine assets with China’s Zhejiang Geely.

 Bloomberg