Tesla's Price Cuts Damage Confidence In EVs: Renault CEO

Luca de Meo says Renault "will continue to protect the value" of its electric vehicles.

By: Dan Mihalascu

Feb 16, 2023 at 11:54am ET

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Renault Group CEO Luca de Meo believes Tesla's decision to cut prices on its EVs is destroying value for customers.

Speaking with Financial Times, he said the US EV maker's constantly fluctuating prices, including the massive cuts last month in the US, China and Europe, damage customers' confidence in the value of their vehicles.

"I hope that they [Tesla] continue to reduce to zero, but we will continue to protect the value of our electric vehicles. This is destroying value for the customer, for sure, when you do this."

The executive's comments echo complaints from Tesla customers who had already bought the US automaker's EVs at higher prices and saw their cars lose significant value overnight.

Of course, Luca de Meo is not that worried for Tesla owners' financial well-being; his comments actually send a signal to the markets that Renault does not plan to enter an EV price war.

Gallery: Renault Megane E-Tech Electric (2021)

Luca de Meo made the comments after Renault announced that its operating margins had doubled to 5.6 percent in 2022, while cash flow hit a record following a €3 billion ($3.2 billion) turnaround to cut costs.

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The Renault CEO's criticism of Tesla follows the French automaker's step up in its EV sales. Renault is now the third-largest electric car brand in Europe, and second for hybrids behind Toyota. Renault has focused on selling higher margin vehicles, relaunching larger cars and abandoning its previous strategy of trying to increase sales at all costs.

Luca de Meo said the good financial results prove that Renault is "out of the emergency room and back in the game" after the company's "fundamentals have been thoroughly cleaned up."

Renault sold 37,313 Zoe electric subcompacts and 33,000 Megane E-Tech Electric crossovers last year in Europe, but neither model made the top 10. The Dacia Spring did as the eighth best-selling EV in Europe in 2022 with 48,948 sales – the Romanian brand is a wholly owned subsidiary of Renault Group.