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Renault Delays Electric Twingo Version on Lack of Demand

A worker cleans the front of a Renault Twingo automobile ahead of the opening day of the Geneva International Motor Show in Geneva. Photographer: Gianluca Colla/Bloomberg
A worker cleans the front of a Renault Twingo automobile ahead of the opening day of the Geneva International Motor Show in Geneva. Photographer: Gianluca Colla/Bloomberg

May 23 (Bloomberg) -- Renault SA, Europe’s third-largest automaker, will slow down electric-vehicle introductions in another sign that consumer demand for zero-emission cars is falling short of automakers’ plans.

The battery-powered version of the revamped Twingo city car, presented at the Geneva Motor Show earlier this year, is on hold, Chief Performance Officer Jerome Stoll said yesterday in an interview in Cannes, France, without providing a date for the model to go on sale.

“We’re not in a situation where the market has followed our forecasts,” Stoll said. “People haven’t yet reached the point where they feel the need to have an electric vehicle for full daily use. People need to feel that need to shift to electric models.”

Mass-market battery-powered vehicles have failed to meet industry delivery goals as buyers object to a lack of driving range and higher prices versus gasoline or diesel cars. The exception has been the luxury segment, with market leader Bayerische Motoren Werke AG increasing production of the i3 electric city car this year as orders beat forecasts, and Tesla Motors Inc. saying this month that sales growth of its Model S sedan has been limited by battery-supply constraints.

‘Premium Buyers’

“Most people who buy electric vehicles tend to be premium buyers, as zero-emission cars are more expensive,” Sascha Gommel, a Frankfurt-based analyst at Commerzbank AG who has a hold recommendation on Renault stock, said by phone. “They’d rather go to premium brands like Tesla or BMW, as opposed to a maker of conventional mass-market cars like Renault, which needs to justify the premium on its electric vehicles.”

In Germany, Europe’s biggest automotive market, about 12,200 all-electric cars were in use at the start of 2014, out of a total 43.9 million autos registered, according to the Federal Motor Vehicle Office. That’s 0.1 percent of the 1 million battery-powered cars that German Chancellor Angela Merkel wants on the country’s roads by the end of this decade.

Volkswagen AG, the Wolfsburg, Germany-based carmaker that’s Europe’s largest auto producer, outlined plans in September to offer as many as 40 electric or hybrid vehicles, including 14 models with alternative drives by the end of 2014. Munich-based BMW, which is set to start delivering the i8 hybrid sports car in June, rolled out the 34,950-euro ($48,000) i3 in November and said in April that it’s raising production 43 percent. The heads of both companies said in October that they support Merkel’s electric-car goal for 2020.

Missing Deadline

Renault Chief Executive Officer Carlos Ghosn said in September that the company, based in the Paris suburb of Boulogne-Billancourt, and Japanese partner Nissan Motor Co. will miss a 2016 target of jointly selling 1.5 million electric cars annually. The manufacturers have a medium-term budget of 4 billion euros to develop the models. Renault delivered 19,093 electric autos last year out of a total of 2.63 million cars and light commercial vehicles.

The French automaker’s electric lineup includes the Zoe and Fluence ZE cars, a version of the Kangoo delivery van and the Twizy quadricycle. Daimler AG has a partnership with Renault to develop a four-seat model for the Stuttgart, German-based company’s Smart city-car brand that will have an electric variant.

The German and French push for electric cars contrasts with a focus on natural-gas technology at Fiat SpA. The Turin, Italy-based company’s only battery-powered model is a version of its 500 subcompact sold in California to meet local emission rules.

Chief Executive Officer Sergio Marchionne said at a conference in Washington this week that he hopes no one will buy the 500e variant “because every time I sell one, it costs me $14,000.” Profitability in the segment is scarce, as “there’s nobody out there who makes any money out of electrifying vehicles, nobody, with the exception of Tesla.”

To contact the reporter on this story: Mathieu Rosemain in Cannes, France at mrosemain@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net Tom Lavell

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