Renault opts for powering down on EV introductions

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Renault opts for powering down on EV introductions

Renault SA, Europe’s third-largest automaker, will slow down introduction of electric vehicles in another sign that consumer demand for zero-emission cars is falling short of automakers’ plans.

The battery-powered version of the revamped Twingo city car, presented at the Geneva Motor Show earlier this year, is on hold, Chief Performance Officer Jerome Stoll said Thursday, without providing a date for the model to go on sale.

“We’re not in a situation where the market has followed our forecasts,” Stoll said. “People haven’t yet reached the point where they feel the need to have an electric vehicle for full daily use. People need to feel that need to shift to electric models.”

Mass market battery-powered vehicles have failed to meet industry delivery goals as buyers object to a lack of driving range.

The exception has been the luxury segment, with market leader BMW increasing production of the i3 electric city car this year as orders beat forecasts, and Tesla Motors saying this month that sales growth of its Model S sedan has been limited by battery-supply constraints.

“Most people who buy electric vehicles tend to be premium buyers, as zero-emission cars are more expensive,” said Sascha Gommel, a Frankfurt-based analyst with Commerzbank, who has a hold recommendation on Renault stock. “They’d rather go to premium brands like Tesla or BMW, as opposed to a maker of conventional mass-market cars like Renault, which needs to justify the premium on its electric vehicles.”

In Germany, 599 new electric cars were registered in April, representing 0.2 percent of the 274,097 autos sold in the market, Europe’s biggest, according to the country’s Federal Motor Vehicle Office.

Renault Chief Executive Officer Carlos Ghosn said in September that the company, based in the Paris suburb of Boulogne-Billancourt, and Japanese partner Nissan Motor will miss a 2016 target of jointly selling 1.5 million electric cars annually.

The manufacturers have a medium-term budget of 4 billion euro ($5.46 billion) to develop the models. Renault delivered 19,093 electric autos last year out of a total of 2.63 million cars and light commercial vehicles.

The French automaker’s electric lineup includes the Zoe and Fluence ZE cars, a version of the Kangoo delivery van and the Twizy quadricycle.

Daimler AG has a partnership with Renault to develop a four-seat model for the Stuttgart, German-based company’s Smart city-car brand that will have an electric variant.

Chief Executive Officer Sergio Marchionne said at a conference in Washington this week that he hopes no one will buy the 500e variant “because every time I sell one, it costs me $14,000.”

Blooomberg

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