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Give electric cars bigger subsidies, says Renault

  Tuesday, 25 June 2013

Renault says that zero emission cars should get bigger Government subsidies than hybrid vehicles, in order to make them a more attractive investment for road users.

At the moment, electric vehicles are eligible for a subsidy of £5,000, with the same discount applying to plug-in hybrids, which effectively combine electric power with conventional fuel technology but are less beneficial to the environment overall.  

Renault’s chief operating officer, Carlos Tavares, feels that a distinction should be drawn between the two:

“We are happy to have support for clean vehicles. It helps the industry… But I would be even happier if it was strictly proportional to the emissions, which means if it is zero it should not be the same as 50, 60 or 100g/km. If you have a tailpipe, it is not zero emissions.”

While some manufacturers are tentatively moving into the electric market, Renault is quickly becoming the leading brand, offering four electric vehicles, with the ‘Zoe’ model by far the most successful. Despite Nissan’s LEAF model being synonymous with the category, Renault has now grown to become the leading player, with global electric sales more than doubling to 36,000 this year:

“We are the leaders in EV [electric vehicle] sales and we intend to stay so. We are the only manufacturer with four EV models.

“Our European market share as an automotive company, including Renault and Dacia, is nine per cent, but our share of the zero-emissions vehicles market is 51 per cent,” said Mr Tavares.

Tavares points towards the financial advantages of manufacturing electric vehicles above hybrids, which demand a high-value, luxury price point, out of reach for many consumers demanding economical commuting vehicles:

“There is nothing wrong with plug-in hybrids, except for the fact that if you look at the [financial] bill of materials for them, it is quite obvious that the cost of a plug-in hybrid is much more than a single-energy powertrain,” he said.

“That’s why this story is becoming a very polarised one. High-end flagship vehicles and SUVS are going for plug-in hybrids, whereas the commuting cars are moving to pure EV because you need to keep the price competitive.

“This is going to have an impact on pricing. For the high-end the price is perhaps not going to be a big deal, but certainly you are not going to see plug-in hybrid [technology] in compact cars.”

Despite a fiercely competitive European car market, Renault intends to focus on differentiation and quality, rather than competing on price, as they have done in the past:

“We have no intention to discount as much as we have in the past,” he said. “It destroys value for Renault as a brand and for the whole industry. Renault wants to step out of that world. Discounting dollars on the hood is not something we want to do.

“But we suffer, of course, from the fact that so many of our competitors are desperate and are making moves in the market that are not brand-friendly.”

The UK car market is currently one of the best for buying new vehicles, with manufacturers offering good discounts and financial providers happy to provide consumers with funding. Why not trade-in your old vehicle for a more energy efficient alternative?

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