Renault CEO questions wisdom of electric vehicle price cuts

Renault CEO Luca de Meo connected Thursday questioned the contented of terms cuts rivals person been implementing successful a bid to bolster marketplace stock for their electrical conveyance fleets.

"We've seen competitors moving prices up and down, etcetera, etcetera this is their decision. But I don't deliberation it's a precise steadfast signifier successful the agelong term," helium told CNBC.

"As electrical cars are ramping up successful Europe, we request to person a steadfast business, and so, successful the lawsuit of Renault, the past happening I'm going to bash is to compromise connected the margins, you know, of electrical cars."

De Meo's comments travel a drawstring of assertive terms drops announced by automakers Tesla and Ford amid unit to stay competitory successful a burgeoning EV market.

Tesla threw down the gauntlet with its mid-January announcement of terms reductions for U.S.-marketed models crossed the committee and for its Model 3 and Model Y wrong Europe. Ford followed connected Jan. 30 with terms trims for its electrical Mustang Mach-E crossover.

However, De Meo signaled that income terms volatility could erode user assurance successful EV products.

"Our precedence volition beryllium to support the worth for the customer," helium said. "Because those kinds of swings are benignant of worth destroying for the customer, deliberation astir residual value, etc. So I deliberation we don't person to destruct the aged happening astatine the beginning."

Renault's semipermanent allies are joining the French automaker's EV push, with Nissan earlier this month pledging to bargain a involvement of up to 15% successful Renault's electrical portion Ampere arsenic portion of a broader overhaul of the companies' 24-year union. Under the reshaped, antecedently lopsided alliance, Renault volition trim its shareholdings successful Nissan from astir 43% to 15%.

"My occupation is to marque the Ampere lawsuit truthful absorbing for them [Nissan and inferior confederation spouse Mitsubishi] that they volition determine successful their superior allocation meetings to enactment wealth determination and not successful an alternate project," helium told CNBC, adding that the concern was not a information of the restructure.

Earlier connected Thursday, Renault reported that its radical operating borderline doubled to 5.6% successful 2022 from 2.8% a twelvemonth prior, adjacent arsenic nett income swung to a 700 cardinal euro ($748 million) loss. It came aft the institution successful May wrote disconnected a 2.3 cardinal euro impairment linked to exiting its Russian positions.

Renault posted grounds currency travel of 2.1 cardinal euros past year, compared with its guidance of supra 1.5 cardinal euros. Net income from continuing operations accrued to 1.6 cardinal euros, from 549 cardinal euros successful 2021, portion radical revenues inched up to 46.4 cardinal euros successful 2022, from 41.7 cardinal euros a twelvemonth prior.

Renault shares were mostly dependable astatine 1 p.m. London, down 0.38% successful intraday commercialized astatine 42.96 euros.

De Meo said helium sees ongoing longevity successful the proviso and logistical obstacles that person plagued automakers since the onset of the Covid-19 pandemic, particularly linked to the yearslong planetary shortage of semiconductor chips.

"We deliberation that, connected the semiconductors, [it] is going to proceed to beryllium beauteous overmuch of a situation for different mates of years, particularly connected the benignant of semiconductors that we usage successful the automotive industry," De Meo told CNBC, estimating that logistical and constituent hurdles led Renault to underproduce by 300,000 cars successful 2022.

He forecast akin losses successful 2022, putting the fig astatine betwixt 100,000 and 200,000.

"So it's going to enactment there. But I deliberation we are a small spot much prepared. We cognize however to find the parts and however to signifier accumulation to support doing it. But we person to admit that this is not going to be, again, a mean year," De Meo added.

Despite this outlook and a "still challenging environment," Renault targets a radical operating borderline astatine oregon supra 6% successful 2022, on with operational escaped currency travel astatine oregon supra 2 cardinal euros.

It besides enactment guardant a dividend of 0.25 euros per stock successful 2022 — marking the company's archetypal payout connection successful 4 years, according to Reuters — owed to beryllium paid successful May, if approved during the company's Annual General Meeting successful the aforesaid month.