Renault accelerates its electric transformation

Luca de Meo made an appointment with the press in the large presentation room of the Technocentre in Guyancourt (Yvelines), Thursday, January 13. The place is not trivial. It is here that the CEO of Renault refines his decisions on the future models of the group. This is where the “Renaulution” takes shape, this accelerated transformation of the old control room, to make it a more electric and more profitable manufacturer. And the timing is not by chance either. One year almost to the day after the launch of the Renaulution project, here is a first assessment.

If we are to believe the figures provided by Renault, the acceleration of the transformation is clear. “Renault has done, in one year, what before, the group would have done in four”, said the Italian boss who arrived in mid-2020. The company is ahead of its main indicators and is announcing a new ambition: its flagship brand Renault now aims to be 100% electric (not even hybrid) in 2030, in Europe, against 90% previously.

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Admittedly, Mr. de Meo does put some conditions on it – in particular that the charging infrastructure is present throughout the continent. But management has confidence in one of the pillars of Renaulution: electrification. This transition is based on the creation of an electricity hub in the north of France. Renault will soon start marketing its electric Mégane assembled at the Douai plant. As of this year, the northern site will produce 80% of electric vehicles.

Restoration of profitability

The other brands – Dacia, Alpine and Lada in Russia – are also moving towards electric, but at a slower pace. “Dacia’s electrification will be consistent with a positioning which requires us not to increase prices”, says Luca de Meo. The E-Tech hybrid technology, which currently equips Renault, could be transferred, in the future, to its low-cost brand, explained the director of engineering, Gilles Le Borgne.

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The other big subject of Renaulution is the restoration of profitability. Renault says it has already achieved its goal of reducing its fixed costs by 2 billion euros and lowering its breakeven point (level of production from which the company makes money) by 30%. All with more than a year in advance. This return to better fortune (the company was losing 40 million euros per day at the start of 2020) also requires more profitable sales. The share of individuals in registrations – the most profitable commercial channel – has thus increased from 40% to 50%. “On some models, we had fallen to 20%”, underlines Mr. de Meo.

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