French automaker Renault revealed an electric sports car on Thursday. It’s the first of a new line of luxury EVs they’re planning. This move could help them compete against upcoming rivals from China. Also, it gives them a chance to gain a bigger market share in a category that’s doing better than other car markets.
European car companies got a short break from Chinese automakers. How? Well, this happened because the EU announced on Wednesday that it would put tariffs of up to 38% on Chinese electric vehicle imports. However, these tariffs are likely only going to delay the rapid increase in sales that Chinese companies are planning. Moreover, these companies are constructing factories in Europe.
Renault’s Expansion Plan
The French automaker plans to introduce seven electric models under its Alpine sports brand to make more profit. The initial model, the compact Alpine electric A290, built on the Renault 5, has some features from the Alpine sports car used in F1 races. Its price will start at 38,000 euros (₹34.2 lakh), which is much lower than Porsche or Ferrari. Instead, it will compete with Audi, BMW, Mercedes, and Tesla.
Renault announced that the new range will help the brand expand globally. In the first quarter, Renault earned 11.7 billion euros (around ₹10.5 lakh crore) in revenue. They predict an increase in sales this year due to new products. Furthermore, the French automaker aims to achieve a double-digit operating margin by 2030. However, they’re encountering challenges, especially in electric vehicle sales, which account for 7% of their business.
Stiff Competition Ahead
The demand for electric vehicles in Europe has decreased significantly because of reduced government subsidies. Renault is also dealing with tough competition from inexpensive Chinese carmakers. However, premium EVs like Tesla’s Model Y and 3, BMW’s X1, Audi’s e-tron range, and Mercedes’ EQ4 are doing good. That’s because wealthier customers who buy these cars are less dependent on incentives.
S&P Global Mobility reports that the proportion of EV models in the EU’s premium car market remains steady at about 17%. This is in contrast to the global market, where the share has dropped from around 14% in 2023 to about 12% this year. In terms of EV sales, the premium segment now makes up 29% of the region’s total, up from 25% last year, according to the data.
Renault aims to achieve sales of two billion euros (₹1.8 lakh crore) for the division by 2026. In addition, they want to surpass eight billion euros (₹7.04 lakh crore) in sales by 2030. Half of this revenue is expected to come from markets outside Europe.
Renault, already popular in Japan, believes there is an opportunity in South Korea and China. They predict sales of one billion euros by 2030 in these markets. However, Renault lags way behind the top players.
Last year, they sold 4,328 Alpine vehicles, whereas BMW sold 330,600 fully electric cars, Mercedes sold 222,600, and Audi sold 178,000, as reported by the German trade magazine Auto Zeitung.
Wrapping Up
We have to wait and see how successful Alpine Electric A290 will be. For now, Renault will reveal the car at Le Mans during the 24 Hours of Le Mans race this weekend.
