French OEM Renault has hailed its progress in reducing costs and time to market ahead of three upcoming EV launches in 2024.
Speaking to analysts at the firm's fourth quarter results call, Renault CEO Luca de Meo said that the company's progress in production procedures sets it up well to take on in-flooding Chinese competition.
"Speed is going to become more and more important in the industry, especially if you want to face the Chinese who are very quick," de Meo says.
Despite underwhelming BEV sales growth across 2023, de Meo says that Renault's production procedures are not only reducing costs to a level which will allow Renault to compete with Chinese EVs on sticker price, but are also allowing Renault to ramp up products at a speed to match that of Chinese OEMs.
"With what we are doing with the Twingo in the A segment, we actually have a set-up which is from a manufacturing point of view, from a technological point of view, pretty unique. There are not many things like this in Europe," de Meo says.
"We took the opportunity with this product to completely revamp the product development process at Renault to get the car done in around two years, which I think is pretty remarkable. So this is now embedded and written in stone at Renault" the CEO continues.
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Currently, EV technology is at a stage of rapid evolution, and products therefore face the risk of quicker obsolescence as competitors release new offerings to the market. By reducing time-to-market to two years, however, de Meo says that Renault will be able "to always be on the market when we need to be".
At the same time, Renault says it is also on track to reduce its EV production cost by 50pc by 2027, at which point the company expects to achieve sale price parity between EVs and ICE "before [the] competition".
Renault Group is set to release three EVs in 2024, starting with the Renault 5, which CEO Luca de Meo calls "our ace to democratise next-gen EV and software", adding that "it is probably the best small EV in the world".
Renault will unveil the Renault 5 in Geneva later this month, followed later in the year by the all-electric Scenic, which Renault is eyeing to go head to head with affordable high-spec Chinese EVs from manufacturers such as BYD, and which de Meo says is "very well-positioned in price versus competition".
The Alpine A290, a compact urban EV, is also set for launch in "mid 2024", the CEO says. And the compact A and B segments are in Renault's crosshairs for the coming years, de Meo says, even beyond the three upcoming releases.
"In the world of EVs, when you can reduce the battery to less than 30kW, then you can get really competitive EVs that people can use and you can go for volume," de Meo told analysts.
Renault therefore updated its guidance for 2024 to a 7.5pc operating margin as the new range rolls out, backed up by a strong free cash flow level of $2.5bn.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
