Renault and VW could team up to make cheap mini electric car

Renault confirmed this Thursday, February 29, that it is in negotiations with Volkswagen to build a low-cost electric minicar for the European market.

The French automaker's CEO Luca de Meo said at the Geneva Motor Show that the company is in “good discussions” with VW, according to a report from Automotive News Europe. He also suggested that other partners were in the running for the minicar partnership, but did not mention names.

I am open to anyone who wants to participate. I have production capacity. I have the platform. I know how to do it.

Luca de Meo, CEO of Renault

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Last week, news broke that Volkswagen, Renault and Stellantis were considering teaming up to make cheaper electric vehicles. The urgency is increasing as European automakers are being left behind by BYD and Tesla, the latter selling more electric vehicles (EVs) in Europe than any other brand.

De Meo added that producing minicars profitably is a big challenge, which is why so few automakers are doing it. But there's time to turn this around, and we're seeing lots of new and exciting options emerging, including the new Microlino Lite microcar.

Microlino Lite. (Image: Disclosure/Micro)

On Renault's part, the objective is to reduce costs in the new Twingo by 40% compared to other EVs, by cutting parts, reducing manufacturing times, using cheaper batteries and accelerating the market launch. The company said it could apply these same measures to its other EVs, including the recently launched Renault 5 and the upcoming Renault 4 small SUV.

“Everything we do on Twingo will go back to the 5 and 4, so their price will go down,” said de Meo.

Challenging moment

  • So far, 2024 has presented a series of obstacles impacting EV sales, and automakers are scrambling to adapt.
  • Among the problems: some governments have reduced or eliminated incentives for electric cars, rental companies are reducing their fleet of EVs, and there is growing opposition to electric vehicles in a tense election year in the US and Europe.
  • Even Tesla is feeling the effects, with a 20% drop in market share this year, wiping out about $150 billion from its market capitalization, more than double VW's value, according to Bloomberg.

Race for the electric car market

To stay in the game, Renault is among the European automakers racing to produce EVs that are priced similarly to internal combustion vehicles — to avoid losing out to Chinese competitors targeting Europe with low-cost EVs.

Renault is targeting 2026 for the launch of the all-electric Twingo, with a target price below €20,000 (around R$107,000). The new electric Twingo will be based on a shortened version of the AmpR Small architecture found in the new Renault 5, which was launched at the Geneva Motor Show. The Twingo will also use an LFP battery to reduce costs.

(Image: S.Candide /

Whether or not the deal goes through with VW or another automaker, Renault “will continue with the project with or without a partner,” the report said. “I don’t have time to waste, so I’m not going to put it off,” de Meo said.

While Stellantis has just launched a sub-€25,000 electric car, the Citroen e-C3, with a short-range version for under €20,000, VW is falling behind in the race to build a cheaper battery electric vehicle. A partnership with Renault could be a viable option to get a new version of the e-Up electric minicar and the Skoda Citigo and Seat Mii models into service, the report said.

It's certainly not the first time European automakers have collaborated on minicars — Toyota teamed up with Peugeot and Citroen on the Aygo/Peugeot 108/Citroen C1, just as Ford teamed up with Fiat to produce the second generation Ka on the Fiat 500 platform .

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