Renault's Hybrid Strategy: A Complete Success in the European Automotive Sector

Renault's CEO Luca de Meo is implementing a successful strategy in the European market for hybrid vehicles with a cost-effective transmission technology. This innovation gives the French carmaker a significant advantage in the electromobility competition. Despite the upcoming EU bans on combustion engines starting in 2035, the demand for expensive electric vehicles in Europe is stagnating. However, Renault is showing surprising strength in the hybrid segment, giving the company a considerable boost following the record losses of 2020. In the first eight months of the year, sales of Renault hybrids, including models like the Clio and Captur, increased by an impressive 55%, while the entire EU recorded growth of only 21.1%. This development catapulted Renault to the second largest hybrid brand in Europe, right behind Toyota. According to analysts at Stifel, Renault benefits from its versatility and agility. The cost-effective and environmentally friendly hybrids help the company meet its emission targets and increase sales. Forecasts from Dataforce and S&P Global suggest that the demand for hybrids will persist until the end of the decade, before electric vehicles dominate. Renault's market value stands at 11.6 billion euros, which is only a quarter of Volkswagen's. This smaller size could be both an advantage and a challenge as competition from China grows. Following the dissolution of its partnership with Nissan and Mitsubishi, and the decision against an IPO for its electric division Ampere, Renault is seeking a new strategic direction. Renault's success is based on the E-Tech transmission technology, which uses fewer components, making it lighter and more cost-effective. This contributes to the positive development of their stock, which has risen by 6.4% this year. Further growth opportunities are expected as Renault plans to introduce new, affordable models. Despite these successes, Renault is under pressure to further reduce CO2 emissions, while sales of electric vehicles stagnate at only 12% of European brand sales. The next big step will be the introduction of new electric SUVs at the Paris Motor Show, including the Renault 4 and 5.