Europe’s automakers cut costs to compete with Chinese EVs

European automakers are concerned about an “invasion” of cheap Chinese electric cars in the region, prompting Renault to say that it was aiming to slash production costs for electric models by 40 percent.

Renault CFO Thierry Pieton said Thursday that the best way to fend off price competition was for the automaker to cut development and manufacturing costs.

The targeted 40 percent reduction is from 2027 onwards for Renault Group’s next generation of EVs.

Renault CEO Luca de Meo said the group would start seeing significantly lower production costs in the second half of this year, reflecting a drop in raw material costs.

“It’s clear we are in competition and that time is of the essence, but that’s the business we are in,” he said. 

Renault Group is spinning off its EV activities into a unit called Ampere, with investment from Nissan. It hopes to take Ampere public in the coming months, depending on market conditions, de Meo said Thursday.