Renault CEO calls for ‘Airbus’ of EV manufacturers in Europe

European automakers could collaborate to share development and production costs, suggests Renault Group CEO Luca de Meo.

At the considerably smaller Geneva International Motor Show, the Renault Group was one of the highlights, besides the Chinese manufacturers BYD and SAIC), presenting its all-important new electric R5.

Europe’s automakers, facing a stiff challenge from Chinese automakers and hard questions about the affordability of electric vehicles, could work together to create an ‘Airbus’ to develop and build accessible cars,  Luca de Meo said.

“We need to be creative to find a solution like the Airbus consortium,” de Meo told journalists Monday at the show. “Partners can share the investment and reduce the costs,” he added. The European consortium Airbus rivals Boeing as the largest airliner maker in the world. Its largest shareholders are the French, German, and Spanish governments.

Next generation in Europe

Renault also plans to launch the next-generation Twingo minicar as an EV built in Europe that would sell for less than € 20,000.  The French company is in early-stage talks with Volkswagen Group to potentially share Twingo’s platform, which will be an even cheaper version of the AmpR Small architecture that underpins the Renault 5. It could use less-costly lithium iron phosphate (LFP) batteries, for example, de Meo said.

The new Renault Twingo EV, due in 2026, has become the symbol of a new, affordable EV generation, starting at under € 20,000 /Renault

The challenge, said de Meo, who is also the current president of the European Car Manufacturers Association ACEA, is to create a value chain in Europe that includes batteries, electric motors, and electronics, much as China has done with government support. “The goal is to source everything in Europe at a competitive price,” he said.

De Meo remembered that Europe’s automakers have already cooperated in the past on a number of projects, including a recent minicar shared by Toyota, Peugeot, and Citroen (Aygo, 108, C1). Another project in the 1980s involved the common ‘Type 4’ platform shared by Alfa Romeo Fiat, Lancia, and Saab (164, Croma, Thema, 9000).

Acceleration instead of deceleration

Renault’s Twingo project will take two years to develop from the final design to the start of production, de Meo said. “That time frame has been cut from four years to three with the Renault 5, and now to two, in order to compete with Chinese competitors.”

“Speed is important against the Chinese,” he added. “We’re in an uncertain world. In the past, with internal combustion cars, you could foresee what was coming. Now, if you take four or five years to react, it’s too late.”

Meanwhile, CEOs Carlos Tavares (Stellantis Group) and Luca de Meo remain bullish on EV development.  They insist they are cutting costs to make sure they can compete against Chinese rivals.

Unlike several rivals, they have no plans to slow their electric vehicle rollouts to counter slowing consumer demand for EVs. “Battery-powered cars will be the dominant technology in the long term,”  de Meo pointed out, discussing the company’s 2023 results earlier this month.

Stellantis boss Carlos Tavares expects growth in electric car sales to continue, despite there may be some bumps. “We won’t slow down investments like some competitors,” Tavares said earlier this month.

Two key factors

Two factors are driving Stellantis’ and Renault’s continued efforts to expand their EV lineup in Europe: tougher CO2 regulations and the growing influence of Chinese rivals such as SAIC’s MG brand and BYD.

De Meo said EVs will become the dominant technology in Europe in the long term “because of the need to comply with the CO2 emissions targets.” Automakers must lower their average CO2 emissions to 93 grams per km next year and to 50 g/km in 2030. “That is only possible by selling many electric cars; we’ll push them.”

The Renault boss said his company “will push the envelope on EV costs in order to reach cost parity with ICE vehicles before the competition. De Meo’s target is to reduce overall EV costs by 40%. “You’ll see the first results with the pricing of the Renault 5 and the Scenic,” he added. Part of the cost effort is a targeted cut of EV production costs by 50% by 2027.

Tavares mentioned the offensive by Chinese manufacturers as a big incentive for European automakers to speed up the transition. He also said it is essential to reduce costs “to make small BEVs affordable for the middle class.”

The CEO said Stellantis currently has 30 EVs on the market and will add 18 more in 2024, eight models in the U.S. market alone. He called the full-electric Citroen e-C3 a ‘game changer’ for Europe because of its starting price of € 23,300 in many European countries.

Tavares calls the new Citroën ë-C3 a game changer with its base price of € 23,300 /Stellantis

“At this price, the vehicle is profitable,” Tavares confirmed. Stellantis is already making money on EVs, he added, although margins are still lower than on ICEs. Stellantis’s long-term target is to sell EVs at the same price as combustion cars.

Blowing warm and cold about China

So, both European car CEOs warn for the Chinese, undoubtedly triggered by the impressive presence of some of them at the Geneva Motor Show, and insist on the need for subsidies from the European authorities to counter the attack (Tavares) and the urge to cut costs and accelerate development (de Meo).

On the other hand, de Meo recently pleaded for more collaboration with the Chinese. The fact that the Chinese car manufacturing group Geely has a big stake in Horse, the part of the Renault Group that will further invest in internal combustion technology, can be seen as an example here.

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