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Renault and Volkswagen have reportedly ended their talks on a potential collaboration for a low-cost electric car without agreement.
Go deeper with GlobalData
Reuters reported that Renault CEO Luca de Meo told the news agency that the plan for the two companies to develop an affordable electric car together – likely based on the Twingo – is now a “a lost opportunity, but there may be others”.
The plan had been to work together on a model with a low enough price point to compete with cheap BEV models from Chinese OEMs such as BYD. In China, BYD is selling electric cars under$10k. European OEMs are struggling to get their models under €20k.
Analysts say that bringing two big automotive corporations together to jointly develop an important model is never easy.
“The difficulties lay in the detail and the question of who brings what to the party is never easy,” says GlobalData analyst Al Bedwell. “The theory behind joint development and sharing costs between OEMs in certain circumstances can sound quite compelling. The difficulties start when you get into the specifics of whose technology gets used, what platform, the provision of major components, production sites and so on. There are going to be competing engineering divisions in the separate companies that want a big slice of the action.
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By GlobalData“The discussions – by their very nature – involve give-and-take compromises on all sides, but sometimes that is difficult to achieve. The matrix of potential project responsibilities can become over-complex – negating the very economies that everyone hoped for at the outset.
“It’s about matching expectations and sometimes the discussions can be rather more complex to iron out in a way that works for both sides. But that doesn’t mean there isn’t a sweet spot for OEMs to get together on shared model development and subsequent production if the will is there.”
