Summary:
In response to a series of price cuts by electric vehicle leader Tesla, French automaker Renault is reevaluating its global electric vehicle pricing strategies to maintain competitiveness, according to a top executive on Monday.
After multiple price reductions in the United States, Tesla extended the cuts to Europe, including Renault’s home market in France, as well as Israel and Singapore, following a discount initiative that began in China in January.
“We will examine each country and market to determine the level of competitiveness needed to stay in the game,” said Fabrice Cambolive, CEO of the Renault brand, while addressing reporters, reports Reuters.
Renault brand sales saw a 9% increase in the first quarter, suggesting that the restructuring strategy, focusing on the most profitable models, may be starting to yield results after four years of revenue decline. However, Cambolive acknowledged that Tesla’s price cuts serve as a wake-up call for competitors.
He mentioned that sales of Renault’s popular Megane electric model surged in March, with a significant number of orders despite minimal discounting. However, the model’s price now matches its competitor’s equivalent. Following Tesla’s recent price cuts globally, the Tesla Model 3 in France is priced at 41,990 euros, in comparison to the 42,000 euros for the Megane electric model.
“It’s evident that Tesla’s price reduction is a challenge, particularly regarding cost. We are closely monitoring this development,” said Cambolive.
Renault brand’s global sales reached 354,545 vehicles during the first quarter of this year, as announced on Monday. The entire group, which also manufactures Dacia and Alpine vehicles, saw a 5.9% decrease in sales in 2022, primarily due to the loss of the Russian market. Renault brand sales, accounting for two-thirds of the group’s total, dropped by 9.4% last year, marking the fourth consecutive annual decline.
Impacted heavily by the COVID-19 pandemic and the global chip shortage, the French company is now focusing on high-margin and electric vehicles to improve profits.
