Renault swings to profit on EVs despite rise of Chinese rivals

By Gilles Guillaume

PARIS, July 29 (Reuters) - Renault posted a 9.4% rise in first-half revenue on Wednesday and swung back to profit thanks to strong electric vehicle sales, as it withstood growing pressure from incumbent rivals and Chinese newcomers on car prices across Europe.

Renault said its sales of fully electric cars jumped 47.6% versus the same period in 2025, helped by the success of the new Renault 5. EVs accounted for one out of every five new vehicles it sold.

"Our first-half results confirm that our strategic model works, even in a complex environment," Renault CEO Francois Provost told reporters.

The French carmaker, which expects price pressure in Europe to continue throughout the year, reported an operating margin of 5.2% for the six-month period, down from 6% in the first half of 2025 but above analyst expectations of 5%. 

Despite increasing competition in Europe from Chinese automakers including BYD and Chery, Renault confirmed its operating margin target for 2026 of 5.5%, versus 6.3% in 2025.

It is hoping to differentiate with new models like the return of the iconic Twingo city car, this time made electric, or with new powertrains such as a first hybrid version of the Sandero, Europe's most sold car in the first half of the year.

As the smallest of the traditional car manufacturers, Renault must preserve its margins if it wants to continue to invest in EVs and new software to compete in Europe. The company said it is in line with its target to reduce variable costs per vehicle by around €400 per year.

In other markets like Latin America or South Korea, Renault is relying on partnerships with other automakers including China's Geely.

It posted a net profit of €700 million ($797 million) versus a net loss of €11.18 billion in the first half of 2025 due to a one-time loss of €9.3 billion related to its stake in Nissan.

Its revenue hit €30.25 billion, up 9.4% from €27.64 billion in the year-earlier period, helped by making cars at its factories for its partners Nissan and Mitsubishi and a higher selling price for its new Clio 6, compared with the previous generation of the car, Renault said.

According to a consensus provided by Renault, 21 analysts on average expected revenue of €29.4 billion and group share net profit of €770 million in the first half of the year.

The French automaker's new car unit sales dropped 0.4% over the period due largely to logistical problems at its low-cost Dacia brand early in the year.

($1 = 0.8783 euros)

(Reporting by Gilles Guillaume; Writing by Nick Carey; Editing by Emelia Sithole-Matarise and Nia Williams)