Renault Group is reporting that its smallest battery-electric models are delivering unexpectedly strong profitability, according to comments from CEO Francois Provost published in the French business daily Les Echos.
Provost said the automaker is seeing "positive margins on the R5, R4, and Twingo - margins that are higher than those of the Megane or Scenic, even though the latter belong to a higher segment." The remark signals a shift from the traditional industry pattern in which larger C-segment vehicles typically carry fatter margins than compact city cars and small sedans.
The company launched the R5 in late 2024. Since then, Renault says the model has risen to become one of Europe’s top-selling electric vehicles. The uptick in interest for new and used EVs has been supported, the CEO noted, by rising fuel prices linked to the Iran war, which has helped push consumers toward electrified options.
Provost also told Les Echos that the group's EV order book has grown substantially in some markets. "The group’s EV order book is up by 50% in some markets, such as France and Germany, since the war started," he said last month, pointing to a notable increase in demand in those countries.
At the same time, Provost reiterated challenges that many European automakers face when shifting to full electrification. He said cumbersome regulations across Europe and an immature battery supply chain have made it difficult for manufacturers to secure attractive returns on electric vehicles. The competitive pressure from Chinese automakers was also cited as a complicating factor for profitability in the segment.
Industry convention has long held that larger C-segment cars command higher prices and margins than smaller, lower-priced models like the R5 or the city-focused Twingo. Renault's CEO framed recent results on its newer EVs as a disruption of that pattern, with certain compact models now outperforming larger siblings on margin metrics.
These developments come amid broader market movements and shifting consumer preferences, but the statements from the CEO focus on observed margins, sales performance of the R5 since its late-2024 debut, and the regional order-book gains Renault has recorded in response to recent geopolitical-driven fuel-price changes.