Key facts
- Renault Group CEO Francois Provost stated that compact electric vehicles are more profitable than larger ones.
- The R5, R4, and Twingo are achieving higher profit margins than the Megane or Scenic.
- The R5 has become a top-selling EV in Europe since its late 2024 launch.
- Demand for EVs has increased across Europe due to rising fuel prices.
- Renault's EV order book has seen a 50% increase in some markets.
Renault Group is achieving better profit margins on its compact electric models than on larger vehicles, according to CEO Francois Provost. He told French business daily Les Echos that models like the R5, R4, and Twingo are yielding higher margins than the Megane or Scenic, despite the latter belonging to a higher vehicle segment.
This trend challenges the typical automotive industry dynamic where larger, more expensive vehicles usually command higher profitability. European carmakers have often cited regulatory burdens and an immature battery supply chain as challenges to profiting from electric vehicles, especially amid competition from Chinese manufacturers.
Since its launch in late 2024, the Renault R5 has become one of Europe's best-selling electric vehicles. Provost noted that rising fuel prices, partly influenced by the Iran war, have helped boost demand for both new and used electric vehicles across the continent. He also mentioned last month that the group's EV order book has increased by 50% in certain markets, including France and Germany, since the conflict began.