Renault Rules Out Price Cuts as Concerns Over EV Price War Hit European Auto Stocks
20 Avril 2023 - 1:26PM
Dow Jones News
By David Sachs
Renault SA doesn't plan to drastically lower prices, Chief
Financial Officer Thierry Pieton said Thursday, after Tesla Inc.'s
moves raised concerns about a potential price war in the European
electric-vehicle market.
Shares in European auto stocks fell Thursday after Tesla flagged
plans to remain aggressive with vehicle pricing. Renault's shares
led the way with a 7.3% drop at 1015 GMT, while Stellantis NV,
Volkswagen AG, BMW AG and Mercedes-Benz Group AG shed 2% or
more.
Renault signaled strong demand in a call with analysts. While
the French car maker will continue to tweak prices with things
financing incentives, Mr. Pieton said it doesn't feel pressure to
slash them.
"The reality is, at the overall group level, the plants are
full," Mr. Pieton said. "We are at 100% capacity generally
speaking, so there's no big incentive to go cut the prices and kill
residuals and go in a spiral that some of the competition is
following."
Despite signals about demand, Renault said its inventories grew
to 580,000 units at the end of the quarter from 480,000 units as of
Dec. 31, and that logistical issues remain.
Tesla reportedly cut prices in Europe last week. In a letter to
shareholders Wednesday, the U.S. EV maker said it aims to leverage
its cost advantages as rival car makers speed up their EV
programs.
Analysts at Bernstein said in a research note that Tesla's
commitment to price cuts intensifies competition in the EV market,
with Renault, Stellantis and Volkswagen looking particularly
exposed.
"Tesla will weaponize its higher standing gross margins, cut
prices and try to grow--or maybe just secure--market share. This
places immense pressure on OEMs [original equipment manufacturers]
who produce EVs in the firing line of Tesla," the Bernstein
analysts said.
Write to David Sachs at david.sachs@wsj.com
(END) Dow Jones Newswires
April 20, 2023 07:11 ET (11:11 GMT)
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