Renault is gearing up to reclaim its position in the electric vehicle (EV) market by introducing new models and implementing a price reduction strategy for its Megane model, aiming to compete with U.S. rival Tesla Inc (TSLA.O) on its home turf. Ivan Segal, the sales director for France at Renault, highlighted the company's focus on the electric segment in 2024 to regain ground against competitors.
Having been a pioneer in the EV market alongside alliance partner Nissan (7201.T), Renault has faced stiff competition from newer entrants. In the French market, Tesla outpaced Renault's electric Megane sales last year, selling 25,000 Model 3s and over 37,000 Model Ys, according to data from AAA Data. Additionally, China's MG brand (600104.SS) made a significant impact by selling 20,000 MG4 vehicles in its first full year in France.
Renault's strategic response involves the launch of the new electric Scenic and the introduction of the R5 in the second half of the year. These models are expected to replace the aging Zoe and Twingo. In a bid to enhance its competitiveness, Renault has opted for a 10% reduction in the starting price of the Megane, bringing it down from 38,000 euros ($41,600) to 34,000 euros in January.
Ivan Segal acknowledged the intensifying competition in terms of pricing and leasing, stating that the electric vehicle market is expected to take a few more years to stabilize. In his words, “The Renault brand's main focus in 2024 is to go back on the offensive in the electric segment, since we're currently second.”
Despite refraining from adopting Tesla's price-cutting policy last year, Renault's decision to reduce the Megane's starting price aims to position it favorably against competitors. When factoring in state bonuses, which do not apply to buyers of the Model 3 and MG4, the Megane is now competitively priced and even slightly cheaper than its Chinese counterpart.
Ivan Segal's insights reflect Renault's concerted effort to regain traction and competitiveness in the evolving electric vehicle landscape: “The competition in terms of pricing or leasing is stronger than a few months ago, and it will take a few more years for the electric vehicle market to stabilize.”