Renault’s CEO advocates for a new ‘E-Car’ category and regulatory reforms to make electric vehicles more affordable in Europe, aiming to revitalise the industry amidst rising costs and Chinese competition.
In recent years, the European automotive industry has confronted significant challenges as the cost of new cars has risen sharply, making vehicle ownership less accessible to many consumers. François Provost, CEO of Renault, highlighted this issue in a recent interview with Autocar, lamenting that the sector is “destroying the automobile industry” due to affordability barriers. He urged European regulators to impose a “regulatory pause” and implement bold measures to restore competitiveness to European manufacturers, especially against the growing dominance of Chinese electric vehicle (EV) producers.
Central to Renault’s vision is the proposal of a new regulatory category called “E-Car,” inspired by Japan’s kei cars , small, lightweight, and affordable vehicles designed primarily for urban use.
These European E-Cars would be electric, under 4.1 meters in length, emit less than 15 tonnes of CO₂ throughout their lifecycle, and be built predominantly with local components, including batteries. Provost suggests that such a category could allow Renault to reduce the prices of models like the future Renault 5, Renault 4, and Twingo electric variants by 10 to 15 percent. This innovation aims for electric cars priced below €20,000, fully manufactured in Europe, to widen accessibility and accelerate the adoption of clean mobility.
This initiative gains further traction as the European Commission appears poised to establish a similar regulatory framework. Reportedly, in December 2025, the Commission plans to announce a category for affordable small EVs positioned between very light quadricycles and regular passenger cars. This move is designed to enable small EVs to circumvent certain costly safety and technical regulations that inflate production costs. It will potentially allow these vehicles to be marketed in the €15,000 to €20,000 range, aligning closely with Renault’s call for an adapted market segment to counter Chinese competition.
The urgency behind such proposals is underscored by alarming industry data. Since the pandemic, Europe has lost about three million new car sales annually due to affordability issues. The average age of vehicles on European roads now approaches 12.5 years, with even higher averages in countries like Spain, stalling fleet renewal, safety improvements, and emissions reductions. According to JATO Dynamics, the lack of affordable cars led to a shortfall of 3.3 million new car sales in Europe between 2019 and 2023. In Spain, average new car prices have surged by 38% since 2019, now around €40,500.
Renault’s electric brand Dacia has already hinted at this concept with its Hipster prototype, an electric urban car expected to retail for less than €17,000, mirroring the ethos of the E-Car category: providing essential, affordable electric mobility to a broader public.
Beyond devising a new car category, Renault’s leadership advocates for a substantial slowdown in the regulatory pressure that has been driving up costs. Provost estimates that carmakers in Europe must comply with over 100 new regulations by 2030, spanning emissions to data protection. He proposes a 10 to 15-year moratorium on new rules, allowing manufacturers to focus on product quality, innovation, and cost reduction, rather than constant compliance adaptation. Importantly, he calls for future regulations to apply only to new models, avoiding retrospective enforcement that forces costly redesigns of existing vehicles, a peculiarity of the European system not seen elsewhere.
Speeding up development cycles is equally critical. Renault is adopting a Chinese-style approach where a vehicle concept can be brought from design to market in under three years, which shortens timelines and lowers costs. The new Twingo E-Tech, with a 260 km range and projected sub-€20,000 price, exemplifies this strategy, thanks to simplified components and production efficiencies yielding up to 25% cost savings with goals of 40%.
Provost also urges Europe to emulate China’s industrial policy model: welcoming foreign investment but insisting on local production, European suppliers, and creation of jobs and technology hubs. He supports tighter controls on Chinese EV brands operating in Europe, insisting they produce locally to ensure industrial benefits accrue within the EU.
While Renault embraces electrification, Provost stresses that the pace of transition must be realistic. The European Commission’s ambitious CO₂ targets, to halve emissions by 2030, are described as unfeasible without risking industrial collapse. He calls for a five-year flexibility window to prevent the sector’s deterioration.
These views resonate with broader industry calls. Luca de Meo, former CEO of Renault and now moving to luxury group Kering, advocated for a unified European strategy to counter Chinese EV makers through strategic projects, green economic zones, and long-term public-private cooperation. His resignation in mid-2025 came shortly after presenting Renault’s “Futurama” plan focused on competitiveness in electrification, signalling potential shifts in leadership amid these pressures.
Critically, while manufacturers like Renault and Stellantis push for deregulation on smaller EVs, safety organisations remain cautious. The European New Car Assessment Programme (Euro NCAP) and some industry stakeholders warn that lowering safety standards for cheaper vehicles could endanger consumers. Nonetheless, small EV segments are expected to grow substantially, with projections estimating a 20% increase by 2030.
Renault’s CEO paints a stark picture: without regulatory reform and a rebalanced industrial approach, Europe risks losing its automotive future to Asia, particularly China. The proposed E-Car category and calls for regulatory pauses are part of a larger European debate on how best to preserve innovation, safety, and environmental goals while maintaining the industry’s economic vitality and accessibility for consumers.
