Renault Reevaluates Global Pricing Amid Tesla’s Unexpected Reductions
A Wake-up Call for French Carmaker
In response to the recent series of price cuts made by its competitor, Tesla, French automaker Renault has decided to reassess its global pricing strategies for electric vehicles (EVs). Tesla’s price cuts have not only taken place in the US but also extended to Europe, including Renault’s homeland, France. As Renault brand CEO Fabrice Cambolive put it, “We will analyze country by country, market by market, which level of competitiveness we need to have to stay in the game.”
Renault’s Sales: A Glimmer of Hope
After a four-year slump, Renault’s sales saw a 9% increase in Q1, 2023. Focusing on the most profitable models has seemingly paid off, with the electrified Megane model experiencing a significant boost in sales in March. Tesla’s price cuts, however, served as an eye-opener.
Comparing Tesla and Renault Models: A Price Standoff
Post price cut, Tesla’s Model 3 now starts at €41,990 in France, while Renault’s Megane electric is priced at €42,000. In Q1, the Megane E sold 3,570 units in France, narrowly surpassing Tesla Model 3’s 3,158 units. Tesla’s upscale SUV Model Y, on the other hand, sold 9,364 units.
Hyundai’s Stance: Not Engaging in a Price War
Hyundai Motor Group President, Luc Donckerwolke, stated at a separate event in Paris that the South Korean automaker would not engage in a price war. According to him, Tesla’s price cuts reflect a sense of unease amidst growing competition.
Renault’s Sales and the Road Ahead
Renault’s sales of 354,545 vehicles in Q1 contributed to its group-wide sales figures, set for release on Thursday. The Renault brand, accounting for two-thirds of the group’s total sales, saw a 9.4% decline in 2022, marking the fourth consecutive annual drop. Impacted by the COVID-19 crisis and a global chip shortage, Renault now looks to higher-margin vehicles to boost profits and plans to spin off and list its electric vehicle unit on the market this year.
Renault’s Position in the EV Race
Renault, an early EV race participant, faltered as Tesla’s growth skyrocketed. In Europe, Renault ranks third for EV sales and third in the electrified segment, including hybrid vehicles, trailing behind Toyota and Tesla.
Tesla’s Shanghai Factory Workers Seek Help
Tesla’s Shanghai factory workers turned to social media, appealing to CEO Elon Musk after learning about plans to reduce their performance bonuses. This move highlights the pressure carmakers are facing regarding costs and margins.
