PARIS -- As the market for electric vehicles grows, some automakers are facing a new worry: ensuring a consistent supply of batteries.
"In the last two years, as the momentum behind electric vehicles grew, we went from chasing the customer to chasing the parts," Gilles Normand, Renault's senior vice president for EVs, said in an interview.
Sales of Renault electric vehicles, including the Zoe subcompact hatchback, grew by 40 percent in 2018 to more than 49,600. However, growth was hampered in the first half by battery supply issues at LG Electronics' factory in Poland, Normand said. Once those were ironed out, second half sales rose by 62 percent over the same period in 2017.
Normand said the global electric vehicle market topped 1 million vehicles in 2018, including a market share of more than 3 percent in China, the largest market.
"It's no longer a very niche market," he said, adding that Renault is expecting global market share to be in double digits by 2022.
Electric vehicle sales in Europe last year grew 31 percent to 126,423, according to the European Alternative Fuels Observatory.
Sales of the Zoe increased by 27 percent to 39,469, with 38,425 sold in Europe -- and more than 5,300 in December alone.
The Kangoo Z.E. van more than doubled sales last year to 9,001 overall, nearly all in Europe.
Notably, the profile of electric van buyers is starting to shift from fleets such as postal services to tradespeople who need to ensure access to diesel-restricted city centers, Normand said.
Renault plans a new generation of Zoe, to be built at its plant in Flins, outside of Paris, but Normand said the automaker had not yet decided on a launch date.
"The Zoe is still a very competitive car and the design is still contemporary," he said. "You shouldn't rush to introduce too early your new generation if the old car is still competitive."
He acknowledged that it would be facing competition toward the end of this year, especially from electric versions of the coming Peugeot 208 and Opel Corsa. "We know the competition is flexing its muscles," he said. "We want to be prepared to answer whatever they will introduce."
Uneven battery supplies
LG, the South Korean electronics giant, started producing batteries at its new plant near Wroclaw, Poland, in the first half of 2018 with capacity to supply 100,000 electric vehicles -- double that of the original plan in 2015 when the factory was announced. Last November LG said it would invest an additional 500 million euros to support production of 300,000 electric vehicles per year by 2021. In addition to Renault, LG has signed a contract with Volkswagen ahead of the launch of the German automaker's MEB platform, designed for electric vehicles.
Normand said the ramp up of production at the Wroclaw plant led to some "tension" in the supply of batteries in the first half of the year, for both new vehicles and after-sales replacements. Another factor is that predictions for EV sales were too optimistic, he added.
"In the past, we were expecting the market to grow rapidly, but the growth wasn't completely in line with initial expectations," he said. "It meant that a number of suppliers, not only LG, were not taking our planning numbers on face value."
He said Renault was working with LG to ensure a more consistent flow for at least the next two years. "We have a framework," he said, "so we are very clear on what we want and they are clear on what they can supply to us."
Other automakers such as Daimler and VW have also warned about battery supply issues.
VW said last year that it had set up a task force with LG to monitor battery production.
Daimler said Tuesday that it was building a battery assembly factory in Jawor, Poland, to supply the automakers' EQ line of electric vehicles, though it will still buy battery cells on the open market.
Toyota and Panasonic also said Tuesday that they will set up a joint venture to produce cells and batteries for Toyota as well as other automakers.
Renault had faced an electric motor shortage in 2017, Normand said, and the company is investing 1 billion euros to boost EV production capacity in France, including tripling motor output at its plant in Cleon. As part of that investment, Zoe capacity will double at the factory in Flins; the factory in Maubeuge will gear up for the next-generation electric Kangoo; and the plant in Douai will prepare for new electric vehicles to be built on a common platform with alliance partner Nissan.
New life for Twizy
Renault's electric urban runabout, the Twizy, has found an unexpected source of customers in South Korea, Normand said. Production is being shifted to the Renault Samsung plant in Busan from Valladolid, Spain. Sales were up 45 percent in 2018 to about 4,000 units worldwide, he said, one of the Twizy's best years since its introduction in 2012.
"You can't kill this model," Normand said. Renault is tailoring the Twizy to fleet sales for postal services and urban deliveries in South Korea, in comparison to Europe where most have been sold to individuals. More than half of all Twizys were sold outside Europe last year.
Elsewhere in Asia, Renault is gearing up for the launch of the Kwid Z.E., or K-ZE electric small SUV for the Chinese market. The K-ZE was shown as a concept at the Paris auto show, and the production version will appear at the Shanghai auto show this spring, Normand said. "This is our first step into the largest electric vehicle market in the world," he added.
