With all the talk of climate change and the Paris Agreement, ask yourself if you’ve ever heard of the Renault Zoe. Probably not. It’s an electric vehicle (EV) sold by French automaker Renault. It’s also the most popular EV in Europe and is mechanically similar to the Nissan Leaf we have here in the U.S. So why should you care about this French EV? One simple reason: Automakers are serving a global market whether they like it or not and Renault-Nissan will soon be setting the agenda for EVs around the world. Partly thanks to partnerships between Nissan, Renault and now Mitsubishi, the Zoe is the perfect barometer for global EV success or failure. If you’re looking for a true game-changing company in the automotive arena, it’s the Renault-Nissan Alliance, not Tesla, that has a firm grasp on the future.
According to CleanTechnica, an EV website, of the top-selling EVs and plug-in hybrid electric vehicles (PHEV) in Europe, Renault, Nissan and Mitsubishi have the top three spots for in 2016 and that trend continues into 2017. In total, Renault, Nissan and Mitsubishi vehicles make up 6 of the top 30 spots, including some oddballs like the Outlander PHEV, Renault Kangoo ZE and Nissan e-NV200. Only VW Group has more total vehicles in the top 30.
EVs Replace Diesel?
Eventually, EVs will replace diesel as the budget and eco-friendly option. Last year, I spoke to a Renault-Nissan executive, and he said that affordable diesel-powered small cars are likely the first to gradually disappear given the stricter emissions regulations coming to the E.U. The main reason is that the cost of compliance is getting to be a serious obstacle. In short, as emissions requirements become increasingly stringent, the cost of building compliant cars will go up. The U.S. pulling out of the Paris Agreement won’t change automakers’ global strategy, but China deferring compliance until 2030 may remove some of the urgency of the agreement. Still, it won’t fundamentally change the direction of the increasingly global automotive marketplace.
The first area to feel this will be small, typically inexpensive cars where the buyers are very price-conscious. Renault-Nissan Alliance Chairman and CEO Carlos Ghosn echoed those sentiments at a press conference at the Paris Auto Show in 2016. And judging by his comments and how he essentially spun every emissions question into a talking point about EVs and the Zoe/Leaf, the next version of that car will likely put the Renault-Nissan Alliance in the catbird seat when it comes to global EV sales.
Maybe they’re already there: If budget friendly, diesel-sipping small cars go away, the next best option for budget-strapped motorists is an EV like the Zoe. According to Forbes, Renault-Nissan is on track to sell nearly 10.5 million vehicles in 2017, second only to Toyota. Therefore, Alliance decisions and innovations are bound to have a ripple effect on the global automotive marketplace.
Granted, European car buyers have a different sensibility when it comes to buying cars, and that’s true for many reasons. One is simple economics. If your income was taxed at 40 percent or more, you’d have a fairly strong incentive to buy a car that’s reasonably priced and uses as little fuel as possible. Also, Europeans buy the smallest cars that will work for their needs, whereas Americans want the largest car they can afford.
The other reason is space. Most European cities struggle with parking. Thankfully, most have a readily accessible public transport system, but in cities like Berlin, Frankfurt, London, Paris and Rome, finding a parking space is kind of like a part-time job. And finding a parking space that will accommodate anything larger than a Toyota Corolla is nearly impossible.
It’s also true that European motorists, in general, are more conscious about the environment, and gasoline-powered automobiles are thought to have a small impact on the environment – about 20% overall, according to the Natural Resources Defense Council. However, EVs aren’t exactly eco damage-free (many cities use coal to generate electricity), but they don’t really pollute at the source (the car), so that makes the “Coexist” bumper sticker crowd feel good about themselves and their automotive attitudes regardless of what’s actually true.
Opt for an EV in a city like Portland, OR, and it’s about much more than feelings — you really are doing less harm, as much of the electricity in that area of the country comes from hydropower plants.
The reason the Zoe matters is that automakers today really have to scrape every last bit of profit from every car, especially small, fuel-efficient cars where the price doesn’t allow a wide profit margin. In large, expensive cars like a GMC Sierra pickup, General Motors might make $10,000 to $20,000 of profit on each one they sell. On a car like the Chevy Cruze or Chevy Bolt EV, the margins are much narrower — some have even speculated Chevy is losing money on each Bolt they sell.
One unique thing Renault does with the Zoe is offer a similar pricing structure to Tesla. Not the “rich folks only” dollar amounts themselves, but rather the idea that you can opt for more power and more range within the same basic car. There’s also a battery leasing program that allows you to buy the car but lease the battery. You can tailor your payments to fit your budget, so it’s kind of like you’re just paying for what you think you need. You can also upgrade the battery without getting a new car if you find you need more range or opt for a plan that Renault says “…is a pay-as-you-drive system whereby the rate is calculated as a function of the distance actually covered” so you only pay for what you literally use. It’s not perfect, however, as it seems no different than having a gasoline bill every month and this approach might not make sense for American drivers. In Europe, 93% of Renault customers lease their EV battery.
Although not perfect, there’s a lot about the Renault Zoe and the way it’s sold that makes sense for the future of automobile ownership. I’m still not sold on the idea of shared vehicles; the examples I’ve seen are clunky, expensive and inconvenient at best. But the idea of owning a car where the price and performance can be tailored to your budget and needs is an idea that’s perfect for the next generation of car buyers regardless of what big governments decide.