08:22 23-02-2026

How Renault is cutting EV costs by 40% to compete with China

Renault is launching a major industrial overhaul aimed at cutting electric vehicle development costs by 40% and matching the rapid pace of Chinese automakers in bringing new models to market. At the heart of this transformation is the Shanghai ACDC hub, where the company is adopting fast-track design methods, minimal bureaucracy, and short decision cycles. The results are already evident: the new Twingo E-Tech was developed in just 21 months and is expected to hit the market priced under €20,000.

A key component of this strategy is direct collaboration with Chinese technology partners. Shanghai eDrive supplies the electric motor for the Twingo, while local contractors optimize some of the electronics and software. This shift has been painful for France, with the Cléon plant losing engine production to keep prices competitive. However, Renault believes this approach is essential to producing an affordable European electric vehicle.

Simultaneously, the supply chain is being revamped: initially 64 components, then over 120 are transitioning to Chinese cost structures. Already, 46% of the Twingo's production costs come from Chinese suppliers. Another cost-saving measure involves switching from expensive NMC batteries to LFP batteries, which are manufactured in Europe and reduce the cost per kilowatt-hour.

Through the joint venture Horse with Geely, Renault saves an additional €400 on hybrid and internal combustion models by pooling development resources and sourcing raw materials at Chinese prices.

In essence, the French brand is overhauling its industrial model: design remains in Europe, but speed and cost efficiency are driven by Chinese methodologies. The success of the Twingo will demonstrate whether Renault can maintain competitiveness in the era of affordable electric vehicles.