Luca De Meo’s (E)Vision

It would have been interesting to discuss the numerous contradictions and paradoxes of his speech with the Minister (Georges Gilkinet, Deputy Prime Minister and Minister of Mobility of Belgium, ed.)”.

Luca De Meo, CEO Renault Group and ACEA President @ EVision

Luca De Meo touches upon this “softly” from the beginning, the CEO of Renault and president of ACEA, present at EVision, the event organized by Eurelectric (the European federation of the electric industry) every year in Brussels. And which saw us, as media partners for the first time, and the only Scandinavian magazine there.

Almost like a prologue, a sentence that summarizes the entire vision of the Italian executive, who asks for a less ideological policy and more realistic visions. What emerges from the long conversation is the need to focus on companies and individuals, namely end consumers and those who are most affected by such significant changes as those desired by the European Green Deal.

Politics distance

De Meo’s introduction, as mentioned, refers to the words of Georges Gilkinet, who left a video message of about 7 minutes hoping that automakers, in short, accelerate the transition process by introducing electric cars soon with a lot of autonomy, lightweight, efficient, and affordable.

We need to offer electric vehicles to consumers that are lightweight, efficient, and also cheaper and more accessible to everyone if we want this [transition, ed.] to be truly sustainable.”

Georges Gilkinet, Deputy Prime Minister and Minister of Mobility of Belgium @ EVision

De Meo’s response, as seen, was not long in coming. But it didn’t just stop at wishing for the Minister’s presence, it went further. After all, even to the writer, it seems that if it were possible to offer vehicles as requested, automakers would have already done so, and these vehicles would be more or less evenly distributed throughout Europe. Yet, that’s not the case, and the writer himself owns an electric car.

Image: NordiskBil

“45 kg of lithium in a battery costs the same as the entire powertrain of an internal combustion engine car, and everything else is still missing. That’s why believing that we can make an electric car efficient, lightweight, and even cheaper than ICEs today is a typical illusion of politicians.

Luca De Meo, CEO Renault Group and ACEA President @ EVision

Moreover, politics has been disappointing in other aspects as well. De Meo focused on the need to return to making small cars, increasingly rare but still in demand as shown by sales data from many European countries.

We presented the new Renault 5 in Geneva, which will have a price below €25,000 (186.400 DKK), and that’s why we’re working on the Twingo, an electric car that costs less than €20,000 (149.147 DKK). By the end of the year, we will also present the R4.

Luca De Meo, CEO Renault Group and ACEA President @ EVision
Renault 5 E-Tech
Image: Renault

But on why small cars have disappeared, De Meo offers perhaps a new perspective:

We need to think and understand why cars have grown in weight and size over the last 20 years. And it’s not because people want SUVs. Of course, that’s part of the story, with SUVs people feel safer. But one of the reasons, as highlighted by some studies we have conducted, is that regulation has pushed the size and weight of cars in Europe over the last 20 years. And indeed, the results of regulation in our sector over the last 20 years are that the environmental impact in terms of CO2 has actually increased, despite the fact that technically in each of the last 20 years emissions have decreased by 80-90% or even more. And this is for two reasons: on the one hand, cars are becoming heavier because all manufacturers are trying to regulate safety, connectivity, and everything else, so we have to use more material; and the second is because they are becoming more and more expensive, so fewer and fewer people can afford them and therefore do not renew their cars. And in fact, the average age of the European car fleet has gone from 7 to 12 years in 20 years.

Luca De Meo, CEO Renault Group and ACEA President @ EVision

A huge paradox, given the ambitions of both Brussels and individual European countries (in particular, Denmark).

And the problem is that no one talks about it, no one realizes it. They simply realize that there is this problem and for them the only solution, the ‘magic wand’, is to switch completely to electric cars.”

Luca De Meo, CEO Renault Group and ACEA President @ EVision

Make the most of it (and residual value)

Is he demolishing the electric car? On the contrary, at EVision Luca De Meo reaffirms Renault’s commitment to electric cars, and it would be strange otherwise given the announcement of so many new electric models, the recognition of Scenic as Car Of The Year 2024, and Renault’s own decade-long commitment to this technology.

De Meo’s criticism is more towards the modus operandi of institutions and, we will see, also towards other automotive companies, and an invitation to exploit “the opportunities that this technology offers” to achieve goals.

In Europe, there are 8 million electric cars. Do you know how many cars there are in Europe? 250 million. 8 million cars are few, 8 million cars are sold in China in less than a year, it’s not a success. But we must admit that it is also true that in a few years we have gone from almost 0% to almost 16%, and there is no technology that, in the last 200 years, has grown so rapidly.

Luca De Meo, CEO Renault Group and ACEA President @ EVision

Hence the desire to start producing smaller cars again because they are cheaper (simply because they have smaller batteries) and because they are more sustainable. According to De Meo, the spread of electric vehicles can come “from below”, but also from above.

Image: NordiskBil

In larger and more expensive cars “there is enough space to fit very large batteries, and therefore not to compromise in terms of usability and range“. Cars like the Scenic, mentioned by him, “have higher costs in terms of list price, but then there are operating costs that are less than a third of those of a combustion car, there is simply no comparison.” And for companies, offering proposals with significant real autonomy, at prices that are in any case decreasing, is an option not to be underestimated.

For these cars, moreover, leasing can be seen as a solution because it can potentially lead to monthly installments comparable to those of internal combustion engine cars. But this is possible

only if we are able to preserve the residual value of this car. Sometimes everyone rushes because we have to increase the diffusion of electric cars, but we must also be very, very careful to propose one car less than demand because if you propose ‘the toy’ that costs little, the impact on value and on the entire system will be huge. This is for example what is happening with the ‘price war’: we don’t do it, but everyone is happy because potentially more accessible electric cars for consumers are obtained in the short term. However, in the medium term, it kills corporate perception and actually affects value for the consumer. Since I am an elegant person [he says, laughing], I will not mention some competitors, also because I respect everyone’s strategy. But we need to find a way to maintain value for the customer as well, at the right level. It means that we must accompany the spread of electric cars, and achieve healthy growth of these vehicles. Pushing too many cars, with solutions where you pay six months, a year, two years later is bad: they are technical issues, but of extreme importance.”

Luca De Meo, CEO Renault Group and ACEA President @ EVision

Airbus model

De Meo also mentions the “Airbus model”, a speech he actually elaborated on in the days before with Bloomberg magazine. He invites us to develop a new Airbus for the development of electric cars, the creation of a consortium, of a European system that shares technologies and restores competitiveness among European giants concerned about the advance of the Chinese and Tesla.

I do not hope for any alliances – he said at the Geneva Motor Show – but we have a native electric and eclectic platform. If someone wants to share it or adopt it, we are available.

Luca De Meo, CEO Renault Group and ACEA President @ 2024 Geneva Motor Show

This speech at EVision is taken up and expanded in a broader way. De Meo, in fact, also hopes for synergies not only between automakers but, since we are talking about electricity, also with the electrical industry and charging operators.

When we start producing electric cars, we inevitably become part of the high-voltage electricity industry. We are in competition with China and the United States, but we pay much more for energy than they do. So together we must find a way to decarbonize energy, making it more competitive within our system and indeed organize ourselves to connect all parts and create an ecosystem that Europe does not have now” he concludes.

Luca De Meo, CEO Renault Group and ACEA President @ EVision

And even if the institutional position in the next European elections were to change, with the investments that have been made it’s difficult to return to endothermic production as we knew it. Rather, the Airbus model aims to share technologies and experiences both for electric and for what is yet to come.

About EVision

The conversation with Luca De Meo took place at EVision 2024, an event that has been organized by Eurelectric since 2020, the European federation of the electric industry specifically to discuss the enormous change in the transport industry and of which NordiskBil has been a Media Partner for the first time. In addition to De Meo, other representatives of the transport industry, including Michael Cole, CEO of Hyundai Motor Europe; and Anders Berger, Director Public Affairs of Volvo Group (Volvo Trucks), had the opportunity to discuss among themselves, as well as with members of the European Commission. The B2B event is open to all stakeholders in the supply chain.

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