The Renault 5 will be a more affordable and profitable electric car
The Renault 5 will be a more affordable and profitable electric car
Renault revealed one of its biggest wagers of the past few years on February 26. The updated Renault 5 will come back to the market with a fully electric drivetrain. Technically and financially, this model will be a huge advance as it will be far less expensive than the ZOE. Furthermore, Renault will profit from it despite this.
A few hours ago, Renault presented its 2023 financial results, highlighting its strong sales and billing numbers.
With an operating margin of $4,84 billion, or 7.9% of turnover, Renault made $56,4 billion in revenue in 2023. A record number indicates the recovery from the pandemic’s shock.
That is the outcome of a plan that its president, Luca de Meo, put into place, prioritizing automobile value above volume and launching the company to dominate the C sector with concepts like Arkana and Austral that have received more positive feedback.
Renault and the challenge of the electric car
However, applying this to an electric automobile is now a hurdle. A brand-new task that will require significant financial investments to build a household that includes the most crucial elements.
To do this, Renault established Ampere, an independent subsidiary. Originally, Ampere intended to become a stand-alone business with a public listing and funding from Nissan, Mitsubishi, and Volkswagen to raise substantial sums of money.
Ultimately, Ampere’s value expectations have been dashed, and Renault has chosen to stick to plan B and retain it in-house.
That will be in charge of creating affordable electric vehicles to compete with Tesla and the Chinese avalanche. A division that has recently required investments ranging from 1,000 to 1,500 million euros is expected to introduce the first of its seven electric vehicles in 2026.
Currently, Renault wants to introduce the “5”, which will stand for a new age of electric vehicles. In this period, Renault will focus on producing affordable, contemporary vehicles.
Features like improved motor efficiency and batteries with new architecture to simplify and lower the cost of production will enable the release of an entry version priced at $26,928.
Luca de Meo, however, cautions that we shouldn’t lose sight of the medium and long term and that we should instead place our bets on working with Chinese manufacturers who have, in his words, “positioned themselves a generation ahead of Westerners” in terms of supply as well as in the development of an ecosystem that spans from the extraction and refinement of materials for motors and batteries to the actual manufacturing of cars.
However, he also makes it clear that he is not afraid of the Asian giant’s approach because he believes that Europeans will continue to be loyal to their brands and that they will be able to hold onto their market share.
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