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The boss of Renault has called for a European war chest to fund electric vehicle subsidies and raw materials, as well as joint infrastructure planning, to see off fierce competition from China.
In an appeal to politicians ahead of European elections in June, Luca de Meo advocated a cross-border approach to developing and funding the industry, instead of simply setting deadlines for phasing out petrol and diesel cars. This would include pooling spending on consumer subsidies and creating “green” economic zones with tax breaks on hires at factories.
“When you set a 12-year deadline and say, in 12 years, there’ll be no more producing combustion-engine cars, and if you don’t, here’s a fine, and see you in 12 years at the end of the tunnel, that’s not a strategy,” De Meo said in an interview.
“We’re proposing trying to build a plan alongside public authorities, people of all industries, non-profits and science bodies . . . it’s about 10 per cent of European output that’s at stake.”
The Renault boss made the call alongside a manifesto sent to European politicians. This recommended investment in regional software development and semiconductors, and a less prescriptive approach to cutting European greenhouse gas emissions.
The industry is grappling with a slowdown in EV sales across Europe: carmakers have invested heavily in producing them but they are expensive for consumers already squeezed by high inflation.
A big source of concern is the threat of cheaper Chinese EVs. The European Commission has already launched an investigation of subsidies on cars from the country and is considering higher import duties.
De Meo declined to give a view on tariffs, but said Europe had to protect its market during the shift to EVs while finding a role for Chinese competitors — in part because European carmakers could learn from a country that was “a generation ahead” in the industry.
“If we want to accelerate the rise of electric cars in Europe, we need to play with the Chinese and find a way to deal with them,” De Meo said, adding he believed the Chinese were “ready to find a deal”.
This could include incentivising Chinese car manufacturers in Europe to use European suppliers, or encouraging Chinese suppliers to set up in Europe, he said — mirroring China’s policies on overseas manufacturers.
The Renault group, which also owns the Dacia and Alpine brands, already has partnerships with Chinese carmaker Geely, including on a combustion engines business it is spinning out into a standalone unit. It also has a joint production agreement in South Korea.
German carmakers, which sell more cars in China than their French rivals Renault and Stellantis, are against higher EU tariffs on Chinese cars. The boss of Mercedes-Benz told the FT last week that tariffs should be cut.
The EU anti-subsidy investigation has also raised concerns about retaliation — China supplies raw materials for EVs such as lithium, cobalt and nickel. De Meo said in the manifesto that “completely closing the door to [China] would be the worst possible response.”
Renault is one of Europe’s smaller carmakers, producing 2.2mn cars a year compared to 6mn from Stellantis and 9.2mn at Volkswagen.
But De Meo said his rivals would also benefit from a broader and more strategic European approach.
“If you want to accelerate, you don’t want to end up with Norway at 90 per cent of electric cars and Spain at 4 per cent,” he said. “We should put in one basket all the funds available to give it to those who do not have money for those investments.”
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