French car maker Renault SA (FR:RNO) is amping up its electric vehicle (EV) game to beat competition in its home market. Renault is cutting the price of its Megane model and relying on new models to beat American rival Tesla (NASDAQ:TSLA) in France.
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France-based Renault is a multinational automobile manufacturer. RNO shares have lost 2.5% in the past year owing to heated competition in the auto sector and macro pressures.
Renault Plans Price Cuts and New EVs
In 2023, Tesla started a price war by slashing the prices of its EVs several times. Even so, Renault preferred to maintain its model prices last year. This year, however, Renault has joined the price war and cut the price of its Megane brand by 10% in January. Megane’s new price now stands at €34,000. Plus, Megane drivers will receive state bonuses for using domestic EVs, resulting in a wider price gap between Renault and its peers. Furthermore, Renault plans to launch its new EVs, Scenic and the R5, this year to outdo the old models of Zoe and Twingo.
As per a Reuters report, Renault’s sales director, Ivan Segal, said that the company is focusing on winning back its number one spot in the EV market in France. Renault, in partnership with Nissan, (DE:NISE) was the pioneer in the EV race in France before losing the leading position to Tesla and other new players. Segal said, “The competition in terms of pricing or leasing is stronger than a few months ago, and it will take a few more years for the electric vehicle market to stabilise.”
Last December, Renault announced plans to sell a 5% stake in Nissan for €765 million to help fund the launch of its EV unit Ampere, which it hopes to spin off and list this year. Importantly, Renault sold only 18,000 Megane EV models in France last year, while Tesla sold 25,000 Model 3s and over 37,000 Model Ys. Meanwhile, Chinese EV maker MG sold 20,000 MG4 EVs in its maiden full year in France.
What is the Price Target for Renault?
On January 9, Bernstein analyst Daniel Roeska reiterated a Buy rating on Renault shares but slashed the price target to €50.00 (39.4% upside) from €55.00.
Overall, RNO stock has a Moderate Buy consensus rating on TipRanks based on six Buys, five Holds, and one Sell rating. The Renault SA share price forecast of €46.68 implies 30.2% upside potential from current levels.
