Renault is moving to significantly reduce electric vehicle costs and challenge the influx of budget Chinese models by adopting cheaper lithium iron phosphate (LFP) batteries for its upcoming range, targeting a 40% production cost cut. This strategic shift aims to make new electric vehicles desirable and accessible, with projected prices below $21,600, and ensure they are not manufactured in China.
The French automaker, like others, is embracing LFP batteries, a technology that is more affordable, safer, and less dependent on rare mineral extraction than traditional nickel-manganese-cobalt (NMC) lithium-ion batteries. While LFP batteries were previously disdained by European manufacturers for their lower energy density and heavier weight, their economic advantages are now too compelling to ignore.
A surge of affordable, LFP-equipped electric vehicles from Chinese brands like BYD, MG, and Leapmotor entering the European market has rapidly diminished the stigma surrounding the technology. Renault’s decision is driven by economics, acknowledging that price is the primary obstacle to mass EV adoption.
This new focus underpins the relaunch of the Renault R5 E-TECH and the upcoming release of an all-electric version of its iconic 1990s Twingo minicar. The electric Twingo is expected to launch with a starting price around $18,360, directly targeting competitors such as the BYD Dolphin Surf.
The strategy is also central to Ampere, Renault Group’s dedicated software and electric vehicle development division launched in 2023. Ampere was established with a dual mandate: enhancing software-defined vehicles and achieving a 40% reduction in EV manufacturing costs, a goal facilitated by the adoption of LFP batteries.
Luca de Meo, CEO of Groupe Renault, highlighted the significance of this move at Ampere’s launch. He stated, “Is there a better way to illustrate our revolution and the boldness of our teams?” De Meo emphasized instilling a sustainable corporate vision, leveraging the group’s strengths, affirming French roots, and striving for European leadership.