Staying ahead of the game

Gilles Normand, Senior Vice President of Electric Vehicle Business at Groupe Renault explains to Alex Kreetzer how Groupe Renault pioneered EVs and revolutionised the French brand in the European market. 

Renault has been involved in the electric vehicle sector for some time now, first taking the leap in 2008, making agreements for planned zero-emissions products with a number of countries around the world including the US, Denmark, Israel and Japan. Through collaboration and R&D, Renault quickly propelled itself into being a frontrunner of EV production in Europe, building infrastructure and products before many of its rivals. Renault’s decision to risk moving into unknown territory has certainly paid off, becoming the leader of European EV sales in 2013 - thanks to its extensive range of vehicles including the Twizy, Zoe, Fluence and Kangoo.

Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance once said: “I don't think either Renault or Nissan alone would have been able to launch an EV successfully. You can have an electric car alone, but what you cannot have is an EV business system, from batteries, to recycling, to cars, to infrastructure [and] to negotiation by being alone.” This speaks volumes of the Alliance’s success, understanding that an automaker cannot simply go out on its own and expect success. Yes, competition is vital in the automotive industry, however cooperation and collaboration is a must if we want to see the mass adoption of EVs across the world.

I sit down with Gilles Normand, the Senior Vice President of Electric Vehicle Business at Groupe Renault to discuss the automaker’s rise to fame in the EV sector and the next steps needed to be taken in order to continue this growth and lead the emerging market.

The path to success 

Normand starts by telling me that there were two defining factors to achieving EV success for Renault, one being the reduction of dependence on petrol and diesel powered cars and the other based around environmental purposes. “We had been contemplating for some time that we needed to reduce the dependence on internal combustion engines (ICE) and needed to prepare for the post-era in the long term. In this, we were looking for different technologies that could drive us into the new era and it became very clear that EV technology was in reach.” In the early 2000s, the automotive industry thought EVs were still some time away, with most OEMs sticking to ICE vehicles as that was where the profit was. In 2008, Renault realised that EV production was becoming technically possible and capitalised before the competition.

The second factor for Renault surrounded imate impact of Co2 from carbon emissions; with the transport industry being responsible for over 15% of global Co2 emissions. Normand stresses that “we are part of this emissions chain and we need to find a solution.” This second factor is the prime reason that most manufacturers are now moving into EV production, preparing for a flood of regulations into the industry over the next few years and removing themselves from being associated with such things as ‘dirty diesels’.

The next step to support this growth was investment, with Groupe Renault putting €4 billion towards development which helped the automaker work towards mass production of affordable EVs. However, Renault’s EV campaign is still very young, only having five years of experience in the field. At the time, this brought on a lot of scepticism from people who believed it would never work for the business. “There were concerns about the safety, reliability and efficiency of batteries used,” Normand explains. “Fundamentally, we developed the technology over the years and started to master it in a much more efficient way. Now, we are already introducing our second generation car when many other competitors are still having concept cars and announcing first vehicles.” Ultimately, those who doubted Renault’s strategic risk, are now having to catch up.

Maintaining momentum

Renault’s new Zoe ze40 is way ahead of its European rivals with a 400 km driving range, achieving around 50% of the same range as ICE vehicles from a clean powertrain. Being a second generation vehicle, Renault has been able to build on its now distinguished platform that holds so much potential for future innovation. “We could see that the technology for EVs was going to exist at the time; this is why we invested so much into the development. Somebody had to start the trend,” Normand proclaims. “Once someone like us starts to use the technology, people start to realise that it can work and can replace other vehicles. Everyone is now making the transition to EVs.” This is even better news for Renault as there will be further investment into the sector. Suppliers will invest into components to support OEMs, communities will invest into the infrastructure needed to grow and the automotive industry will thrive altogether. The industry demands extensive investment to spur future technology. 

Although other OEMs have had certain variations of electric-powered vehicles over the last few years, it seems that there is only a handful of manufacturers like Renault in Europe which intentionally moved into the EV sector because they wanted to find a solution, rather than being forced into the market because of new environmental regulations. The past two years have seen a significant increase in EV rollout from a range of automakers, from mass market to premium brands, primarily driven by emissions scandals and strict government regulations looming over the industry. Renault took the initiative to focus on alternative fuel vehicles in order to find a solution to the environmental crisis years before the state we find ourselves in today. Renault hasn't done it because it had to, it has done it because it believed it was the best thing to do for the industry.

Increasing European market share

Through its EV push, Renault’s image has significantly improved in the European market. For example, over the past two years, Renault has overtaken both Ford and Vauxhall/Opel to become the second-largest brand in Europe by unit sales. Last year, Renault sold 1,100,880 vehicles in Europe, a 13% gain over 2015. Normand agrees that the image of Renault is significantly improving for people who are thinking about purchasing a new electric car.

“These customers are putting the Renault badge at a level we had never achieved in the past. There are a number of drivers for this: we are now an innovative company which brings solutions to market and we are different from what has been done in the past. This is one of the reasons we made the transition from old mobility to new mobility through early investment.” Today, Normand sees people coming to showrooms and buying vehicles like the Zoe who had never considered Renault in the past. “They are coming from premium brands, larger cars, through company leasing and private purchases. At the end of the day, they all want an EV. We are the leaders in EV and customers want to come to us. This is a very powerful tool to have,” he adds.  

Renault doesn’t have a strong market share across the whole of Europe, although it is extremely successful in environmentally focused countries like Norway, which has the largest percentage of EVs. “EVs had a very small presence in the country, however they now have a strong focus on cleaner transport. There is now a much higher level of expectation from customers in regions like this, which is forcing manufacturers like us to continue to move and develop,” says Normand. Four years ago, if you asked someone in Western Europe if they considered their next car to be an electric vehicle, only 10% would have said yes. In contrast, if you ask this question today, 40% would say yes. There is still a large gap between the consideration and the actual purchase of the vehicle but it depicts the great rise in EV attraction. Normand predicts that this upwards shift will continue to move at increasing speeds, which will in time create a much larger market share across the whole of Europe. 

Building for the future 

Although we are now seeing a prominent 'EV boom', there is still a bigger and more significant transition that is going to affect the automotive world. The main hurdle in the way of this great shift is the lack of infrastructure. We are currently involved in a 'chicken and egg' scenario where customers are waiting for OEMs to build EV charging stations but governments will not invest in them until they see a significant rise in EV demand. The good news is that the infrastructure is now being built, but there needs to be a constant chain of investment and collaboration in order to build an appropriate ecosystem.

“Today, across Western Europe you have 85,000 charging points and by 2020 we will have approximately 200,000 as a result of investment,” Normand tells me. “There are more investments, more volume and more competition on the way.” This is great news, however automakers must now make this infrastructure visible to the customer, allowing them to access information on things such as charging stations. Renault is developing applications which allow customers to access the vehicle to show them where the nearest compatible charging stations are and allows them to pay with a mobile phone across the grids. 

“Today, across Western Europe you have 85,000 charging points and by 2020 we will have approximately 200,000 as a result of investment,” Normand tells me. “There are more investments, more volume and more competition on the way.” This is great news, however automakers must now make this infrastructure visible to the customer, allowing them to access information on things such as charging stations. Renault is developing applications which allow customers to access the vehicle to show them where the nearest compatible charging stations are and allows them to pay with a mobile phone across the grids. 

As mentioned, competition has always sparked innovation in the automotive industry, however it can be an issue in the emerging EV sector, especially from an infrastructure perspective. One major issue is the variation of charging stations that OEMs have produced for customers, which runs the risk of turning Europe into an EV turf war. This is a significant issues in mass EV adoption, so automakers must come together to distinguish a standardised method for all. “I think charging standardisation is best for the whole industry. We have tried extremely hard to find a harmonised way for our charging stations. We don't necessarily use the same current as others as there are so many variations but, at the end of the day, EVs have to adapt to a lot of environments,” adds Normand. “In Europe, we have already defined what will be the standard charging point, so it is important that similar action is taken around the world.”

Moving forward

Normand explains to me that Renault has a three pillar strategy for the mid-term. The first pillar involves focusing the successful Zoe, being the most sold EV in Europe that is bringing in a lot of positive value for the brand. “In Geneva, we showcased the Zoe e-sport concept to show that this is just the beginning for this model. Orders are up 74% since the beginning of the year, showing significant demand.” The second pillar focuses on light commercial vehicles, already one of Renault's emerging trends of the company. “We want to combine the best of both worlds, following our announcement of the new Renault Kangoo Z.E and Master Z.E large van. We think it is vital that we develop our segment coverage across Europe.”

The third - and largest - pillar is China, the major player in the EV industry. 96% of Renault’s EV sales are in Europe and Normand wants to capitalise on China’s booming industry. “We have been investing in China and have already started EV production in South Korea,” Normand says. “There are two cars we want to introduce into China; with one car set for the end of this year; a vehicle based on the Fluence, tailored for the market.” There are 250,000 EVs registered in China, which is over half of the total worldwide EV sales of around 500,000. Normand also highlights the huge amount of non-registered EVs in China, which amounts to 600,000-700,000 vehicles, typically within the A segment. “With our partner Dongfeng, we are aiming for this segment because China is going to regulate this market. We are targeting $8,000 as a price tag without incentive, so it will be an extremely cost-competitive modern EV.” Illustrating Renault’s future incentives, Normand tells me that “this is the what; now we are working on the how and the when. We are very excited about it.”

We now live in an industry which is constantly evolving at an alarming rate, so it is important that players progress as quickly as possible to stay ahead of the game. It will be extremely interesting times for Renault over the next decade, as it continues to develop EV technology and expand into a number of markets around the world.

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