Luca de Meo (CEO of Renault): "We Need Multiple Engines, Electric Alone Won't Cover All Uses"

Luca de Meo, CEO of Renault, is one of the executives leading European manufacturers who sees the industrial world with clarity. During the presentation of the Alpine A390 in Dieppe, where the brand has its factory, he had a meeting with the press, attended by ABC.

—Recently, you mentioned difficulties in making money with small cars. What does that mean for the future?

—It's not just our problem: it's an industry-wide issue. When I spoke about the CAFE regulations last year, something similar happened. The media interpreted it as Renault having a problem, but we are better off than others. We sell many small, electric, and hybrid cars. I reduced fleet emissions from 15% to 4%. It's a significant achievement.

The problem is that no one is making money with small cars. Polo, Fiesta, Corsa... all are struggling. If you achieve a 10% margin on a €20,000 car, you earn €2,000. Now, add new safety, emissions, technology regulations, and inflation... it's no longer viable.

—Is that why small models are disappearing?

Yes, at Seat, we had many debates to justify a new Ibiza. But 30% of Europeans want a small car because they can't afford more or live in cities with tiny garages.

Renault, Stellantis, Volkswagen, Skoda, Seat... we all work in that segment. We are asking for specific regulation for small cars, like the 'kei cars' in Japan. Here, electric technology makes sense. You can use a smaller battery, reducing costs. Once we cross that threshold, small electric cars will become widespread.

—Production of segments A and B is declining. How will it affect the industry in Spain, Italy, or France?

—Yes, it's already happening. At least two countries have seen their production fall for this reason. I launched the last Fiat Punto in 2006. There hasn't been a replacement. Does Fiat not deserve a new Punto? It was a symbol – like the Uno or the Bravo – but the economy no longer allows it.

—Alpine represents less than 1% of Renault Group's sales. What is the vision for the future?

—Yes, and I'm fine with that. I'm not chasing volume. You'll never hear me talk about volume targets at Renault, and I won't do it with Alpine either.

Of course, internally we handle numbers to justify investments, but Alpine is not here to grow for the sake of growth. It couldn't exist without Renault, just like Dacia, which benefits from amortised parts, supply chain, dealership network...

Look at the current A110: the body is manufactured elsewhere, then transported to Dieppe for final assembly and customisation. That's how we can make a profitable product with limited volume. The game is about value.

And remember: in the premium market, the most important thing is residual value. Try buying a used A110 right now. The car holds its value. That's what distinguishes a premium brand.

There's a famous image of Jean Rédélé, the founder of Alpine, saying over 50 years ago that buying an Alpine was like buying shares on the stock market. That philosophy is still alive.

And since Alpine represents only 1% of the group's volume, I don't need it to gain market share in Europe. I do it for positioning. To show the public – and the internal team – that Renault can make high-end products.

—Are you still convinced that Alpine can grow being 100% electric? Or should it be reconsidered?

—I'm convinced. Look, I don't think Europe will completely backtrack on the Green Deal. Politically, it would be very difficult to return to the starting point. Let's assume the electric market doesn't reach 100% by 2035, and it stays at 50%. Even so, that's 7 million electric cars in Europe, from a flat market of 15 million.

That represents a huge opportunity. If we want to grow, we have to invest in electric. I'm not abandoning hybrids: four years ago, we weren't on the map. Today we are number two in Europe after Toyota.

We have a 20% share where we are present in conventional hybrids, in a segment that represents 10% of the total market. Imagine achieving that in electric. That's our path.

We can't see this as a war between combustion and electric. It's not black or white. We need multiple solutions because electric won't cover all uses. Unless we accept that the European automotive market will shrink by half, we must give space to other technologies. That's why I'm pushing for a shift from tank-to-wheel emissions calculation to equivalent CO2 over the entire lifecycle. This better reflects reality. It's a logical, scientifically sound, and politically acceptable proposal.

That's what we need in regulation. Not ideology, but solutions for real problems, with practical and technologically open tools.

—How did you modernise Alpine?

—Four years ago, we had a car at the end of its cycle, a plant about to close, and scattered departments. We compressed everything. We started with the Mégane platform, from the C segment. But then I made the – somewhat irrational – decision to invest in a dedicated modular sports platform, which will lead to the next generation of the A110. With that, we believe we can make an electric car lighter than a comparable combustion car.

We are experimenting with in-wheel motors, lower centres of gravity... all in the spirit of Jean Rédélé. He started with a Renault base, enhanced it, and reduced weight. We do the same, but with modern technology.

At the centre of it all is competition. So, when I'm asked if I'm going to sell the Formula 1 team because we're not getting good results, I say: no way. Competition is the heart of Alpine.

We are in F1, WEC, Dakar, Formula E. We even develop components for McLaren and Nissan. All of that is part of the DNA.

Relaunching a premium brand takes at least 20 years. Three generations of products, right decisions, consistency. I worked at Audi. It took them 25-30 years to become what they are. With thousands of engineers and billions in investment. This is not achieved in a single generation, but we are on the right path.