1. Photographer: ALASTAIR MILLER

    Don't panic. Yet.

    Renault's shares have plunged following news of a raid by French government fraud investigators as part of a probe into vehicle emissions. Is this Volkswagen part deux?

    We don't have all the facts yet but there are reasons to think this investigation may be less damaging.

    First, according to Renault, the officials conducting the test believe they won't "uncover the presence of a defeat device." That pared the share loss on Thursday from a dizzying 23 percent to a more circumspect 11 percent.

    Second, Renault is 20 percent-owned by the French state. The government has little incentive to crush a pearl of French engineering (and creator of French jobs) through punitive fines.

    Third, Renault doesn't sell cars in the U.S. Some 21 percent of sales are in France and another 33 percent in other European markets.

    Renault's Sales Volumes By Region 2014
     
    Company

    That's important, as VW has discovered to its cost. VW's problems have looked manageable in Europe, so far at least. But it still faces billions of euros of fines brought by the far less amenable U.S. Department of Justice, as well as the prospect of large-scale civil lawsuits.

    Stuart Pearson, an analyst at Exane BNP Paribas, said in a worst-case scenario Renault would face 4 billion euros ($4.37 billion) in costs to recall all the diesel cars it had sold since 2009, but he said this was very unlikely. That compares to the 2.9 billion euros of market capitalization wiped from Renault's shares by their 11 percent decline on Thursday afternoon.

    There are a few complicating factors, however. When Volkswagen came a cropper over diesel emissions, rival carmakers swiftly distanced themselves. That's more difficult in Renault's case. Renault owns 43 percent of Japan's Nissan Motor in a parts and factory-sharing alliance. Nissan holds 15 percent of Renault's shares. Renault-Nissan also shares vehicle platforms with Daimler to help cut costs. Daimler's shares fell about 3 percent on Thursday.

    Another probe could also further cloud the future of diesel vehicles in Europe, which accounted for 58 percent of Renault's European Union sales and 62 per cent of Peugeot's in 2014.  The charts below show the heavy exposure of Europe's carmakers to the technology. 

    Diesel Exposure (European Union)
     
    LMC, Exane BNP Paribas estimates
    Diesel Exposure (Global)
     
    LMC, Exane BNP Paribas estimates

    More broadly, it's set to further stoke suspicions about real-world carbon dioxide emissions from Europe's autos industry. Car-buyers have come reluctantly to accept that their vehicles rarely achieve the kind of miles per gallon performance advertised on the sticker. That must end.

    Renault's share price slump is a reminder of just how nervy the market is regarding emissions related issues. Much greater transparency would help investors put the emissions ghost to rest.

    This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Chris Bryant in Frankfurt at cbryant32@bloomberg.net

    To contact the editor responsible for this story:
    James Boxell at jboxell@bloomberg.net