Renault accelerates electrification transition It is expected to fully sell electric vehicles in Europe by 2030

According to Automotive News Europe, on January 13, Renault CEO Luca de Meo said at a media event: "By 2030, 100% of the renault brand will sell electric vehicles in Europe. ”

Last July, de Mayo set the target at 90 percent, with the remaining 10 percent being other types of vehicles. He said Renault had stopped selling new cars with internal combustion engines ahead of schedule and would fully transform into an electric vehicle brand in Europe by 2030.

At the event, de Mayo said the company also has "Plan B" in case any issues hinder the automaker's strategy to achieve full electrification within a decade. According to him, after 2030, if there is an unfavorable situation of insufficient charging infrastructure or excessive electricity prices, Renault Group may still sell some internal combustion engine models through the Dacia brand.

Speaking about Renault's new goal of becoming an electric vehicle brand, Luca de Mayo said that "we have an obligation to actively participate" in Europe's transition to carbon neutrality.

On July 14, 2021, the European Union passed a series of proposals aimed at urging all walks of life to accelerate the pace of moving away from fossil fuels, aiming to achieve at least 55% reduction in EU net greenhouse gas emissions compared with 1990 levels by 2030 and carbon neutrality by 2050. Through this reform, Europe hopes to boost economic growth and thus become a global leader in the global response to climate change.

In the same month, Renault announced its electrification strategy for eWays ElectroPop, including the goal of building a Renault ElectroCity power ecosystem, developing high-performance locally produced sustainable batteries, partnering with Envision Power to produce low-carbon batteries, and launching 10 new pure electric vehicles by 2025.

In fact, in recent years, European car companies including Volkswagen Group, BMW, Daimler, Stellantis and other european car companies have announced a clear roadmap for electrification transformation and put related products on the market. According to analyst Matthias Schmidt, electric vehicle sales will account for about 11% of total sales in Western Europe in 2021, up from 6.8% in 2020.

Renault has been making a number of adjustments to the electrification transition, including "layoffs and burden reductions".

On September 17, 2021, Renault plans to cut up to 2,000 engineering and support positions in France and recruit others as part of the transition to electric vehicles. As part of a broad restructuring plan, Renault has announced layoffs of about 4,600 jobs in France. The company said Thursday it would negotiate with unions about the latest layoff plans.

The company said it will recruit 2,500 people in other functions, will create a net of 500 new jobs overall, and plans to produce nine new models in France.

In terms of product launch, Renault will launch the new Megane E-Tech Electric and Kangoo Van E-Tech Electric models in the next step. According to the plan, by 2025, Renault will also launch at least four pure electric models, including the Renault 5, compact SUV), small crossover, and van.

In addition, in terms of supply chain, Renault has also reached cooperation with lithium ore suppliers to ensure the stable supply of upstream battery resources.

Last July, Australian lithium miner Vulcan Energy Resources signed a 5-year lithium supply agreement with South Korea's LG Energy Solutions. On August 2, Vulcan announced that it had signed a long-term lithium supply agreement with French automaker Renault. It's the latest move by an electric vehicle maker to lock in the supply of this battery metal at a time when demand is expected to surge.

Under the agreement, Vulcan will supply 6,000 to 17,000 tonnes of lithium per annum to Renault from its geothermal brine deposit in Germany starting in 2026. The five-year agreement can be renewed if both sides agree. Renault has previously said its goal is to have 90 percent of its models purely electric by 2030.

Affected by factors such as intensified market competition and the epidemic, Renault has fallen into the "quagmire" of losses in recent years. Renault lost a record 7.29 billion euros ($8.35 billion) in the first half of 2020, according to the earnings report. After six months at the helm of Renault, de Mayo proposed a plan to get Renault out of trouble in January 2021, including an electrification transition strategy and a package to reduce costs.

In the first half of 2021, Renault turned a profit of 368 million euros and achieved an operating margin of 2.8%, bringing the free cash flow of the automotive business close to equilibrium. On February 18 this year, Luca de Mayo and CFO and Deputy CEO Clotilde Delbos will announce Renault's 2021 results. According to Renault's previous forecast, the operating margin for the full year of 2021 will be the same as in the first half of the year, and it will achieve positive free cash flow from automobile operations.

De Mayo said that "the effectiveness of Renault's turnaround program is impressive", describing it as one of the fastest cases in automotive history in recent years. He noted that Renault's fixed costs have been cut by 2 billion euros, a year ahead of schedule, and are expected to reduce the break-even point by 30 percent by 2023.

When it comes to car pricing, Renault's net pricing rose 6 to 7 percent, and de Mayo said chip shortages and inflation have pushed up car prices across the board, with chip shortages leading automakers to prioritize selling more lucrative models. "We're better at pricing than the market."

In terms of costs, de Mayo said that the development and capital expenditure of new models has been reduced by 40%, and the development time has also been reduced by 25%.

Renault's alliance with Nissan and Mitsubishi is a key element in reducing R&D and production costs. But the league has been in disarray since the arrest of Carlos Ghosn, Ceo of Nissan Motor and chairman of Renault, in November 2018. However, Renault and Nissan executives plan to meet at the end of January and hold a joint press conference. De Mayo hopes to form a "new cooperation trend" with Nissan in Europe and hopes to reach a consensus so that the two brands can work together to launch new solutions and initiatives.