$8,000 EVs could be possible with government incentives in place

It’s no secret China has become the world’s largest market for electric cars and automakers from all corners of the world have taken notice and are gearing up to enter the lucrative market, all with the hope of biting off a big piece of that pie. One of these companies is Renault and part of its plan to get a chunk of the market is to offer electric vehicles in China that will cost as little as $8,000.

Yes, an $8,000 Renault electric car could happen in China, all thanks to the increasing amount of incentives the Chinese government is offering to get its citizens to buy electric cars. Right now, these incentives are nearing $20,000, and that’s per vehicle. That provides a company like Renault plenty of wiggle room to develop electric cars while not squeezing itself out on a small budget. Renault-Nissan big boss Carlos Ghosn made the prediction of sorts at the New York Times Energy for Tomorrow conference in Paris last week and while he didn’t dive into the specifics on how the company plans to navigate itself around those price points, he did say that the company is embracing the challenge of making this breakthrough because, in his own words, “it’s going to change the game.”

So how exactly can Renault accomplish this goal? For one, it already has a local partnership in place with Chinese automaker Donfeng. Together, the two companies have created a local joint venture, Dongfeng Renault Automobile Co., to develop electric vehicles together with testing for a self-driving EV already set to start this month. In addition, Renault has already indicated plans to move away from traditional engines like diesels and focus more on zero-emissions vehicles. On that note, it also has some technologies in place to help aid it in its development of electric cars, including those that are earmarked for the massive Chinese market. One such technology is the Z.E. 40 batteries that was unveiled at the 2016 Paris Motor Show with the 2017 Renault Zoe.

Considering the stakes that are involved in breaking into the Chinese market, Renault looks to be making a push to be one of the first global brands to make its market on the growing market. Offering an electric car that could cost as little as $8,000 after government incentives is one way to do that.

Continue after the jump to read the full story.

Ambitious goals call for ambitious people

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You have to give Carlos Ghosn credit. The man isn’t afraid to make bold predictions even if it could come at the expense of creating huge challenges for his company. An $8,000 electric car is a pretty startling thing to say, especially when you consider the kinds of technologies that are needed in those cars. Developing the cars won’t come cheap and Ghosn is putting a lot of faith in the Chinese government’s incentives to help mitigate the costs prospective buyers are going to incur to buy these EVs. It’s risky to put out that number and then see later on that the numbers don’t add up. That’s going to put Ghosn, and Renault for that matter, in a bad light.

On the other hand, there is some truth to what he’s predicting. The Chinese government has been aggressive in offering one incentive after another to its people, encouraging them to buy zero-emissions vehicles instead of gas- or diesel-powered cars. If these incentives continue to add up, that benefits companies like Renault and those who are keen on challenging the dominance of current China-based EV companies like Kandi and BYD.

A healthy competition isn’t going to be a bad thing either now that China is on pace, according to publication EV Sales, to reach 300,000 sold EVs in the country this year. With companies like Renault, Volkswagen, and General Motors either trying to enter the market or build up its existing lineup, those numbers are likely to shoot up in the coming years.

Model Price
Chevrolet Bolt EV $37,495
Nissan Leaf $29,010
Volkswagen e-Golf @28,995
Kia SOUL Ev $33,700
Fiat 500e $31,800

There is that part about Ghosn’s prediction that shouldn’t be ignored. He did say that Renault could offer EVs in China for as low as $8,000. What he didn’t say was how Renault was going to do it. That’s the one thing about this story that’s worth keeping an eye out for. Is Ghost referring to a full-fledged EV with all the cursory bells and whistles or is he referring to an EV with spartan amenities? The latter scenario is more plausible, but if Renault really wants to make a name for itself with its EV models in China, it has to resist going down that road and focus on developing as rounded an EV model as it can and hope that the Chinese government can keep giving these incentives out.

Read our full review on the 2017 Renault Zoe here.

Source: Reuters

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