Executives at Renault Group say they hope the European Commission’s plan for an ‘E-car,’ a small, low-cost EV built in Europe, can be accomplished by freezing regulations for existing small cars rather than creating a new category.
Such a freeze would allow automakers to lower their cost base and make the cars economically viable and more affordable, Renault Group CEO François Provost and Renault brand CEO Fabrice Cambolive said at the unveiling of the new electric Twingo in Paris.
The commission is expected to release a proposal to increase the affordability of small cars on December 10th as part of a package of measures intended to stabilize the car industry, which has been roiled by competition from China, the transition to electrification, and what critics call an unreasonable regulatory burden.
E-car initiative
Demand for new cars in Europe remains nearly 3 million units below pre-pandemic levels, industry groups say, threatening hundreds of thousands of jobs at automakers and suppliers. The E-car initiative could help recover volume and support production levels by making European-built electric cars available at prices of €15,000 to €20,000.
There are several paths to that goal, including separate rules for small cars similar to those for kei cars popular in Japan, modifications to existing passenger-car rules for E-cars, and support for small cars through tax breaks and incentives.
At the unveiling of the Twingo, the executives proposed a new solution: Pause new regulations on small cars to allow automakers to find ways to cut costs and reduce prices.
“I’m not asking to remove regulations, I’m just asking to have 10 or 15 years without new regulations on electric cars measuring 4.2 meters or less,” Provost said. “This would give automakers and suppliers time to find ways to cut costs,” he added.
100 new regulations by 2030?
François Provost argued that more than 100 new car regulations are planned in Europe by 2030, and that Renault must devote a quarter of its engineering staff to meeting them.
“Instead, those engineers could be trying to reduce costs and improve technology. The consequence is that people can repurchase a car,” he said. “And this will create a new, virtuous sector.”
Provost said that a 4.2-meter length would cover the core of Renault’s EV models, including the new Twingo, the Renault 5 small hatchback, the Renault 4 small SUV, and even the Megane compact car, which is 4,199 mm. He said this would include 55 % of the potential market.
Stop the clock
Cambolive, who is also Renault Group’s Chief Growth Officer, gave the example of the new Twingo. He said the Twingo will be profitable if it is “well equipped.” “Why not freeze regulations in the coming years and give us time to work on the price of the car?” he asked.
“What is important is to help us make the car more accessible,” Cambolive argued. “For that, you have two solutions: Either you create a new category, with fewer constraints, fewer features, fewer ADAS, and so on, or you stop the clock in terms of regulation.”
“Of the two, we would prefer to stop the clock on our existing lineup to be capable of working on the car, to reduce even more costs, and then to reduce the list price,” he concluded.
