Renault making higher profits on compact electric models than Megane, says CEO

PARIS, July 6 (Reuters) - Renault Group is achieving better margins on its compact electric R5 than larger models like the Megane or Scenic, CEO Francois Provost told French business daily Les Echos on Monday.

• European carmakers have frequently said cumbersome regulations in Europe and an immature battery supply chain make it hard to turn a profit on electric vehicles, particularly with fierce competition from Chinese counterparts.

• Larger, so-called C segment vehicles are typically more profitable than smaller models like the R5 small sedan or Twingo city car as they command higher prices.

• However Provost said that trend has been challenged since the launch of the company's newer EVs.

• "We are making 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," he told Les Echos.

• Since Renault launched the R5 in late 2024 it has become one of Europe's best-selling EVs, with rising fuel prices due to the Iran war helping to boost demand for new and used electric vehicles across Europe.

• The group's EV order book is up by 50% in some markets, such as France and Germany, since the war started, Provost said last month.

(Reporting by Dominique Patton; Editing by Jan Harvey)