Renault leverages AI to halve EV production costs by 2027
Renault SA aims to significantly reduce the cost of producing electric vehicles by 50% by 2027, a strategic step as competition for affordable mass-market cars heightens.
On 7th December, Renault revealed its plan to bolster its manufacturing competitiveness. A key aspect of this strategy is the goal to shorten vehicle development times from three years to just two. This acceleration, coupled with the introduction of AI-driven efficiencies, is projected to also reduce the production costs of internal combustion engine vehicles by 30% over the same period.
These initiatives are part of Renault's major transformation, which earlier this year included reshaping its longstanding alliance with Nissan Motor Corp. The French car manufacturer is gearing up to list its EV unit, Ampere, in the coming year. Targeting a valuation of up to €10 billion, the move has garnered substantial investment interest from Nissan and Mitsubishi.
Renault's commitment to AI integration is already evident. The company currently utilises over 300 AI applications in various aspects such as tracing car parts and enhancing quality control. The plan is to expand this number to 3,000 by the mid-2020s. Notably, Renault has developed an industrial Metaverse, which has already saved the group €270 million this year, primarily through predictive maintenance.
Reducing EV production costs by half could be a game-changer in competing with Chinese manufacturers, who are entering the European market with more economically priced vehicles. CEO Luca de Meo is set to introduce the Renault 5, priced at €25,000, next year. Additionally, the company is revamping the Twingo for the electric era, with a price tag of under €20,000, expected to be launched in 2026.
As part of this industrial shift, Renault plans to manufacture four new models by 2027 at its Bursa site in Turkey. The company has successfully halved its capital expenditures over the past four years. This efficiency enables it to launch 12 new models in the coming year, marking a significant milestone in its ambitious journey.