Renault says cutting electric vehicle prices will ‘kill’ car value
French carmaker aims to protect ‘residuals’ of its models, says finance chief Thierry Piéton
Renault has warned that cutting electric vehicle prices will “kill” the residual value of cars, hours after Tesla vowed to keep reducing its own rates to drive sales higher.
The French carmaker said on Thursday its main aim was to keep customers’ monthly lease payments as low as possible, which would require it to protect the “residual value” of a car.
“When you cut prices significantly, residual value takes a hit,” said Renault’s finance chief Thierry Piéton.
“There is no big incentive to go cut the prices and kill the residuals and go into a spiral that some of the competition has done,” he added. “If it results short term in slightly lower volume, so be it.”
Tesla has slashed prices by up to 20 per cent on some models since the start of the year, leading to fears of a price war across the industry.
The US electric-car maker has seen the residual value of its vehicles fall significantly over the same period, the Financial Times reported last month, potentially making its cars more expensive to lease.
Elon Musk on Wednesday indicated Tesla would keep lowering prices to pursue its target of growing market share.
Shares in Renault dropped 6 per cent in Paris on Thursday, though the stock has risen 50 per cent in the past year.