Renault confirms talks with VW to partner on small EV

Renault confirmed that it is in talks with Volkswagen to partner on a battery-electric minicar for Europe.

Renault is in "good discussions" with VW on the small EV, said the automaker's CEO, Luca de Meo, at the Geneva auto show.

De Meo also said he was speaking to other potential partners, without naming them. "I am open it to anybody who wants to jump in. I have production capacity. I have the platform. I know how to do it," he said.

European automakers are rushing to offer EVs at a similar price point to combustion-engine models to avoid losing out to Chinese car companies that are targeting Europe with inexpensive EVs.

Renault said in November that it will launch a Twingo full-electric minicar as early as 2026 with a target price of below €20,000 euros.

At the time Renault said it was in talks with several automakers as potential partners for the Twingo but declined to comment on names or timings.

At the Geneva show on Monday, de Meo said Renault and VW are in “early talks” to potentially share the Twingo's platform.

The new electric Twingo will be based on a shortened version of the AmpR Small architecture that underpins the new Renault 5 introduced at the Geneva show.

To cut costs, the Twingo could use less-costly lithium iron phosphate (LFP) batteries, for example, de Meo said.

Renault will forge ahead with the project with or without a partner. "I don't have any time to waste, so I will not postpone it," de Meo said.

VW falls behind

VW is falling behind in the race to bring affordable small battery-electric cars to market at a similar price point to combustion-engine models to avoid losing out to Chinese car companies.

Stellantis has just launched its own sub-€25,000 EV, the Citroen e-C3, with a short-range version to come at below €20,000.

Partnering with Renault would help VW to launch successors to the e-Up electric minicar and its siblings, the Skoda Citigo and Seat Mii.

VW brand's successor to the Up could be called the ID1 and would be positioned below the upcoming ID2 hatchback that was previewed by the ID2all concept.

VW brand CEO Thomas Schaefer has said he is open to partnerships to help reduce the retail price of a new small EV to below €20,000.

The European car industry has a history of collaborating on minicars, which are much harder to produce profitably because of their low selling price.

Examples cited by de Meo include Toyota's partnership with Peugeot and Citroen to produce the Aygo/Peugeot 108/ Citroen C1 minicar, as well as Ford's collaboration with Fiat to produce the second-generation Ka on the Fiat 500 platform.

De Meo has experience with minicars. He is credited with making the modern, retro-styled version of the Fiat 500 a success while leading the Italian brand. Before becoming Renault CEO, he was head of VW Group's Seat brand.

Tougher CO2 emissions targets and tighter safety regulations have pushed many brands out of the small car market.

"Nobody is able to produce small cars profitably," de Meo said in Geneva.

40% cost reduction

However, switching to electric drivetrains gives automakers a chance to return to the smallest segments if the costs can be managed, he said.

Renault aims to reduce the cost for the new electric Twingo by up to 40 percent compared to current generation electric cars through a combination of parts reduction, shorter manufacturing times, speed to market and cheaper battery chemistries.

De Meo said cost cutting achieved from the Twingo project would be applied to the newly launched Renault 5 and upcoming Renault 4 small SUV as they progressed through their lifecycle.

"All the things that we will do in the Twingo will revert to the 5 and the 4, so their price will go down," he said.