Luca de Meo, CEO of Renault, contrasts his optimism against the backdrop of struggles faced by competitors like Volkswagen and Stellantis. While competitors announce significant profit drops, Renault has avoided downgrading its financial targets by focusing solely on electric vehicles (EVs). The company’s new plant in Douai, capable of producing 500 EVs daily, signifies a substantial pivot to electrification. De Meo emphasizes that growth will only come from EVs, predicting a 25% annual increase in this segment by 2030, while acknowledging the need for collaboration with Chinese firms for technological advancement.
On Wednesday morning, Luca de Meo was on a state visit to Morocco alongside President Emmanuel Macron. By the afternoon, the Renault CEO was on stage at a car factory in Douai, northern France, searching for his glasses. With a smile, he joked to the audience, “Unfortunately, I’m getting older.”
At this moment, de Meo is perhaps the happiest automotive executive in Europe. As he engages the crowd, disturbing news keeps streaming in from the corporate offices of his competitors. Just before his speech, Volkswagen announced a significant drop in profits, mainly due to poor sales in China.
Hours later, Stellantis follows suit with disappointing headlines: the parent company of Opel, Fiat, Citroën, Peugeot, and other brands reported a staggering 27% drop in quarterly revenue compared to the previous year.
Transitioning to Electric Vehicles
Only de Meo maintains his smile. He confidently tells the audience that Renault is the only European automaker not to have revised its financial targets downward.
He is optimistic that this trend will continue. To illustrate why, Renault invited journalists from across Europe to its most advanced factory, which previously produced millions of compact cars. A year ago, Renault completely transitioned this facility, along with three others in the region, to electric mobility.
Each day, 500 electric vehicles roll off the assembly line in the expansive halls, including the new Renault 5, a compact and relatively affordable model that the company has high sales expectations for. Outside the factory doors, bright rows of the flashy little cars await transportation.
The Douai factory is part of Ampere, a subsidiary established a year ago. Its 11,000 employees are dedicated solely to the construction and development of electric vehicles—not just for Renault but also for partners like the Japanese brand Nissan.
Not Enough Speed
De Meo primarily founded Ampere for one key reason: he realized that when engineers worked on both internal combustion engines and electric drivetrains simultaneously, the development of new technology progressed far too slowly.
Renault cannot afford this delay. De Meo states to the audience that there’s no turning back to combustion engines. “I say this not only as a manager but also as a car enthusiast.”
According to the Renault CEO, electric vehicles are not only more environmentally friendly. They also accelerate faster and run more quietly. The most crucial aspect, however, isn’t the drivetrain but the software: since an electric vehicle is always connected to the internet and has access to power even when idle, it essentially becomes a mobile smartphone.
By 2026, Renault aims to launch Europe’s first “software-defined vehicle.” This industry buzzword refers to a car controlled by a single, central software that governs everything from the drivetrain and recharging to climate control, music, and navigation—and eventually, even managing home garage doors or preheating kitchen ovens. Regular updates promise to make these vehicles progressively better, with close collaboration with Google.
Projected 25% Annual Growth
De Meo asserts that European car manufacturers have no choice but to pivot towards electric vehicles. Future growth will exclusively come from this segment, predicting an average sales increase of 25% per year by 2030. In contrast, the market for combustion engines is stagnating.
In the over €40,000 price bracket, electric cars already hold a 35% market share. The challenge now is to boost sales in the more affordable market segment. However, Europe’s industry must act swiftly to remain competitive, or risk being overtaken by Chinese manufacturers.
Chinese cars are often not only cheaper but also comparable or superior to their European counterparts. The EU has recently implemented import tariffs due to China subsidizing its automotive brands, providing some breathing room for Europe in the competition against new adversaries.
Renault’s electric subsidiary Ampere plans to reduce vehicle prices through streamlined production and the development of more efficient batteries and drivetrains. De Meo points out a significant advantage: a large portion of their suppliers is located just a few hundred kilometers away.
For example, the factory of Japanese battery manufacturer AESC is less than 500 meters from the Douai facility and is currently undergoing rapid expansion. Soon, it will deliver batteries for 200,000 electric vehicles per year via electric trains to the nearby car plant.
Better and Faster
However, Renault cannot achieve the transition to electric mobility alone. Ironically, to compete against Chinese rivals, the company will need assistance from the very manufacturers it is up against.