Renault and Volkswagen refused to jointly produce a cheap electric car | Companies

Renault and Volkswagen will continue to go their separate ways in the search for the long-awaited low-cost electric car. As Renault CEO Luca de Meo confirmed this Wednesday, negotiations between both companies for the joint production of an electric car costing less than 20,000 euros have reached a dead end after months of negotiations. “I wanted to show that European industry can work together as a team, so I think this is a missed opportunity, but there may be others,” the Italian manager admitted in a statement published by Reuters, which had previously announced that both companies had turned down from cooperation.

The goal of both groups was to join forces to counter the influx of Chinese brands that have emerged in recent years and will be coming to Europe and which have a competitive advantage in technology and costs compared to the European industry. Thus, Renault will continue to independently develop the new Twingo, designed to be the cheapest diamond brand electric car with a price of less than 20,000 euros, which should enter the market in 2026. “Of course you can. “Go it alone,” but in certain segments and businesses where we need scale, it makes a lot of sense (…) we have to find solutions,” De Meo said in April regarding a possible alliance with Volkswagen. This isn’t the only alliance De Meo is working on: last month he unveiled a joint venture between Renault and Volvo to make electric vans.

For its part, Volkswagen will take a little longer to make its electric car available for less than 20,000 euros, which is not expected until 2027. The German manufacturer is suffering from the shift to electric vehicles and competition from Chinese company brands, which is why a significant 20% cost cut has been proposed in its payroll, especially for the brand that gives its name to the German consortium. “To ensure sustainable success, in 2024 we will focus on increasing the production of new vehicles, reducing costs, making greater use of synergies within the group and establishing a stronger regional positioning,” said Arno Antlitz, the company’s chief financial officer. company, in the presentation of the group’s annual results for 2023.

In March, the consortium admitted it was exploring possible alliances to produce its low-cost electric car, although it did not name the companies it was negotiating with. “We are conceptually working on a solution and do not rule out cooperation in this area,” admitted group CEO Oliver Blume. Thomas Schaefer, CEO of the VW brand and director of the consortium’s general brands group, said that four possible projects are under consideration to create the car, which will be called ID.1.

The German group is lagging behind in the race for a cheap electric car compared not only to Chinese brands but also to other European rivals. Its first €25,000 car won’t arrive until 2025, while Stellantis and Renault, with their Citroën C3 and Renault 5, already offer models priced below that. Stellantis also bought 20% of Chinese company Leapmotor to sell its affordable cars in Europe from September.

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