Renault Is Still In Denial About The EV Transition
The car industry has discovered the concept of the large online publicity event. Tesla has its Battery Day, Volkswagen had its Power Day, GM offered a fireside chat with Mary Barra, and today (Wednesday 06/30/2021 as I am writing this), Renault had a large online presentation of its electrification plans. Let’s just say that I am not impressed.
The presentation by Ford of its intentions with their F-150 model was shocking for the market. VW announced 6 large battery Giga factories to electrify its ambitions. Nothing like this happened at Renault’s presentation. There was a lot of ambition to be the best and greenest in Europe, but the numbers did not support that ambition.
When talking about Renault, it was not always clear when the industrial Groupe Renault (Renault, Dacia, Lada, etc.) was the topic, or when the numbers were for Renault the car brand. For example, when mentioning a goal of 90% BEV in 2030, that sounded great. But it was the brand. Other Renault Group companies were targeting 10% in 2030, giving the Group a meager 63% target. (Renault is 2/3 and Dacia/Lada is 1/3). And that is for the European market in 2030, not worldwide.
Another problem is the abundance of “petrolheads” in the management of Renault. Now that the original Mr. EV is exiled to Lebanon, they can embrace plug-in hybrids and fuel-cell vehicles, take all the time in the world to delay the transition. They don’t yet realize that for a new technology in its startup phase, other rules apply than for the legacy ICE vehicle at the end of its development cycle.
In late 2019, a renewed Zoe was launched. It was the best bang for the buck in its class and even the surrounding classes. But 2020 was the start of all the other legacy carmakers launching their new BEVs. Now the Zoe is just in the middle of the pack. Next year it will not be competitive any more. With legacy fossil fuel vehicles (FFVs), you need a new model every 7 years, before a model loses too much of its competitiveness. To stay competitive with a BEV, you need an upgrade every 2 years at the moment. The Zoe will be succeeded by a new model in 2024. That is two years too late. The successor is a nostalgia edition of the Renault 5, the predecessor of the Renault Clio.
Renault will be without a viable model for over two years in its most important segment, the segment in which Renault is often the European market leader with the Renault Clio. It will be hard to recapture the lost market share with a nostalgia model. Some nostalgia models are doing great, like the Fiat 500, others, like the Volkswagen Beetle, remain a niche product for the nostalgia crowd.
Renault (the brand) is showing its green intentions by targeting up to 90% BEV sales by 2030. In the small print, though, it is car sales in Europe. The aim of 90% BEV sales (1,000,000 cars) in Europe is only 70% of the Renault Group’s European car sales, 50% of all European light vehicle sales, 25% of its worldwide sales.
The Renault Group’s other markets are the Middle East, Africa, and South America. Those are the parts of the world most devastated by the climate crises, yet Renault is doing almost nothing to mitigate it there.
Renault is in an excellent position to become the leading carmaker in its non-European markets. Those markets are just starting the transition to fully battery electric vehicles. Many of those markets are more than eager to hasten the transition and switch to 100% renewable energy. The Dacia Spring is the perfect platform to help those markets transition. It needs a version with a single cabin and a bed large enough to hold a stack of PV panels. Sell them in a three-car bundle, two with beds filled with PV panels and one normal with the electronics for a microgrid. Bringing electricity to 700 million people — that is creating a market and being really at the forefront of the green revolution.
I asked if Renault had a contingency plan in the case the demand in Europe was 90% BEV in 2026. Group sales are likely >2m at that time. The moderator only put half the question to the management, leaving out the part about consumer demand. It became incomprehensible, and the answer had no relation to the original question. Perhaps I was not clear enough in my question. But they did answer my question in a way. It was outside the scope of the imagination of Renault, and that is scary.
It was not all negative what Renault was telling us. It is building two battery gigafactories in Europe. It is working on better electric motors. It is pioneering the second-life use and recycling of batteries. Its research is going along two paths to solid-state batteries. V2G is an important part of its green initiatives. The kWh price at the pack level will more than halve in the next 6–10 years.
Renault does realize change is coming. Only, it does not realize how much and how fast. With the solid foundation for the Renault brand in Europe, it should be able to scale its BEV expertise to its other brands and to markets outside Europe when the market demands it. Most importantly, Renault should make a contingency plan B(EV) that describes the future after 2030 with only models without a tailpipe — even a tailpipe for water, because their dabbling in hydrogen fantasies will be over at that time.
The auto market is not only transitioning in Europe. This is a worldwide movement. The industry is in a race to survive. The survivors are those carmakers that can transition the fastest.
For those interested, the literal texts of the questions I submitted during the Q&A are below. Only the first question was half conveyed to the management.
- The BEV market in many EU countries is moving towards 20% this year. If it is the start of the infamous S-curve of disruptive transition, that S-curve could reach its top around 2025. If that happens Renault needs about 2.000.000 BEV in 2026. If this widely expected development becomes reality, can Renault scale the production capacity and get the needed 150GWh of battery cells.
- When can we expect the next generation of Pro-Pilot in all Renault BEV.
- The Zoe is loosing its competitive edge. It will be until 2024 before the Renault 5 ZE will be in production. How do you propose to keep relevant the B-segment. And when can we expect the Captur ZE.
- The CO2g/km of PHEV will likely be corrected to the real world CO2g/km emissions, ~120gCO2/km. Do you have a contingency plan for the situation.