Renault CEO: R5 Electric Model Brings Higher Margins Than Megane or Scenic
Renault Achieves Stronger Margins with Compact Electric Models
PARIS, July 6 (Reuters) - Renault Group is achieving better margins on its compact electric R5 than larger models like the Megane or Scenic, CEO Francois Provost told French business daily Les Echos on Monday.
Challenges Facing European Carmakers
• European carmakers have frequently said cumbersome regulations in Europe and an immature battery supply chain make it hard to turn a profit on electric vehicles, particularly with fierce competition from Chinese counterparts.
Profitability Trends in Vehicle Segments
Traditional Profit Margins in C Segment Vehicles
• Larger, so-called C segment vehicles are typically more profitable than smaller models like the R5 small sedan or Twingo city car as they command higher prices.
Shifting Trends with Newer EVs
• However Provost said that trend has been challenged since the launch of the company's newer EVs.
CEO Provost's Statement on Margin Improvements
• "We are making positive margins on the R5, R4, and Twingo — margins that are higher than those of the Megane or Scenic, even though the latter belong to a higher segment," he told Les Echos.
Market Impact of the R5 Launch
Sales Performance and Demand Drivers
• Since Renault launched the R5 in late 2024 it has become one of Europe's best-selling EVs, with rising fuel prices due to the Iran war helping to boost demand for new and used electric vehicles across Europe.
Growth in EV Order Book
• The group's EV order book is up by 50% in some markets, such as France and Germany, since the war started, Provost said last month.
(Reporting by Dominique Patton; Editing by Jan Harvey)
