- Renault is analyzing changes to its electric car pricing strategy to maintain its competitiveness in response to the heavy discounts that Tesla is carrying out.
- Lowering the selling prices of products is a common marketing strategy to boost demand.
- Renault’s improved sales in the first three months of 2023 indicate that its restructuring strategy focused on more profitable models is paying off, but Tesla’s pricing strategy is problematic.
The French vehicle manufacturer Renault is analyzing changes in its pricing strategy for electric cars in all its markets.
The decision aims to ensure that its products remain competitive in an increasingly competitive market and within the framework of the strong discounts that the leader in this segment, Tesla, is carrying out.
The versions come from a “senior executive of Renault”, as published Reuters This Monday, April 17.
It must be remembered that after lowering its prices several times in the United States, Tesla decided to lower the value of most of its models in Europe, including France, Renault’s main market.
Elon Musk, CEO of the pioneering electric car company, has also decided to lower the price of Tesla in Israel, Singapore and China.
Fabrice CamboliveCEO of the Renault brand, said in Paris that the company “It will analyze country by country, market by market, what levels of competitiveness we need to participate.”
Renault’s latest sales data is good.
The brand sold 9 percent more in the first three months of 2023, a sign that the restructuring strategy focused on concentrating on the most profitable models is paying off.
Renault came from four years of falling revenue.
According to Cambolive, the improvement in sales also occurred in April, but warned that Tesla’s pricing strategy may be “a wake-up call.”
Sales of Renault’s electric Megane, one of its best-selling EV models, grew strongly in March even though there were no discounts. However, Tesla’s sales now place the models of both brands at equal prices.
After Tesla’s price cut, the Tesla Model 3 is sold in France at 41,990 euros and the electric Megane at 42,000.
The Megane-E delivered in the first three months of 2023 3,550 units in France. Tesla’s Model 3, meanwhile, 3,150 vehicles, and without the discounts that now operate in that market. Tesla also sold 9,360 units of its high-end Model Y SUV.
“It is clear that the Tesla sales are a challenge. It is an issue that we are analyzing.” Cambolive acknowledged.
Between January and March, Renault sold 354,550 vehicles worldwide.
Electric car pricing strategy: Tesla vs. Renault
The offer in the sale prices of a product has always been an effective marketing strategy to drive demand.
By lowering the marketing prices of their products, companies can make their products easier to buy for a broader range of customers, which generates better revenue, key to brand health.
In recent years, the use of this strategy had become more prevalent due to increasing competition in various industries.
According to information from HubSpotin the US last year 60 percent of companies reported that they had used some kind of price containment strategy as a way to boost demand.
The technological example of this strategy is Apple, when in 2020 it reduced the price of the iPhone SE by $50 with the aim of generating sales among a group of people for whom phones of that brand were impossible to buy.
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