Renault Twingo ZE is grossly overpriced

Renault Twingo ZE is grossly overpriced
New 2020 Renault Twingo ZE

The small electric car Renault Twingo ZE will be on sale later this year, but its price is very disappointing.

In Germany, BAFA (Federal Office of Economics and Export Control) manages the “environmental bonus” funding. To be eligible for subsidies, the electric car model needs to be included in BAFA’s “List of Eligible Electric Vehicles”. The latest version of this list also includes the Renault Twingo ZE, in which the basic version “Vibes” costs 20.831,94 euros (VAT excluded).

Including the regular German VAT of 19 percent, the electric Twingo gets a final price of 24.790,01 euros. However, for the remaining months of this year, VAT in Germany was temporarily reduced from 19 to 16 percent as part of the Corona stimulus package.

With the temporary VAT of 16 percent the price drops to 24.165,05 euros.

In Germany, buyers receive 6.000 euros from the state, and a 3.000 euros net discount from the automaker (3.480 euros at 16 % VAT, 3.570 euros at 19 % VAT).

 

Anyway, cases like this show us that government subsidies are counterproductive and incentive automakers to overprice their electric cars.

With a WLTP range of 180 km (112 miles) from a tiny 22 kWh battery, there’s no good reason why the electric version of the Twingo costs twice as much as the ICE (Internal Combustion Engine) version.

Unfortunately, for legacy automakers electric cars are still just compliance cars required to avoid emission fines and their prices don’t reveal their true cost.

For example, if an automaker decides to sell 100.000 units in a year only to comply with EU emissions regulations, then it just needs to estimate how high the price can be and still find 100.000 customers. If the automaker estimates that 100.000 customers are willing to pay as much as 15.000 euros for this electric car, which receives 9.000 euros of subsidies, then selling price will be 24.000 euros. It’s just business as usual.

Subsidizing private goods or services is a very inefficient public policy, in most cases the tax-payer money goes straight into the corporations’ pockets that keep prices artificially inflated. The best way to force automakers to switch to electric cars is to make it harder to sell polluting cars with higher taxes. Public money should be used to electrify public transportation instead.

Now I’m curious to know if the Dacia Spring will also be such a disappointment. It probably will…

 

 

More info:

https://ecomento.de/2020/07/10/renault-elektroauto-twingo-ze-preis-ab-24790-euro/

30 Comments
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Francesc
23 days ago

what a pitty.. bye bye renault. I onw a renault ZOE. But if this automaker goes on that way.. my future car will be Sion Sonomotors and not a renault…

Francesc
23 days ago
Reply to  Francesc

*own

23 days ago
Reply to  Francesc

To be fair Volkswagen is doing the same with its electric triplets.

With the COVID-19 lockdown ICE car sales dropped a lot, which means that automakers don’t need to sell as many electric cars as it was previously estimated to comply with EU emissions regulations.

Examples in Germany:

1) If you order a Volkswagen e-up today you’ll only get it next year. It should be called Volkswagen give-up…
2) You can no longer order a SEAT Mii Electric this year.
3) Previously SKODA stated that the Citigo-e iV would cost way below 20.000 euros before government subsidies. However, now the basic version was discontinued and the Citigo-e iV has a starting price of 24.360 euros…

Legacy automakers are pros in gaming emissions regulations. No surprise here.

With such counterproductive public policies it makes me thinks that EU regulators are either incompetent or extremely corrupt. Maybe, it’s both.

Last edited 23 days ago by Pedro Lima
Famlin
23 days ago
Reply to  Pedro Lima

Well written Mr. Pedro Lima

VW e-up is a give-up.
VW promised that ID.3 will launch in 2020-summer and with summer ending in September-20, we have another 9 weeks. Lets see whether they are launching or delaying.

Since all automakers are playing the same game, no 1 automaker need to worry about any competition. If the ICE vehicle sales fall, then they will scramble for the market share by launching more BEVs.

Or Tesla should sell a small affordable BEV.
Model 3 has provided a serious competition, that has dented the market for many luxury compact cars.

Leo B
22 days ago
Reply to  Pedro Lima

The VW triplets were sold out in the Netherlands in february! Some parties like (private) lease provider tried to get some cars allocated to other countries (and mostly failed), but clearly production is very low.

VW however may have miscalculated, since they are way off their CO2-target. Of course they may self-register a large number of ID3’s at the end of the year, but that will also decrease their margin. Anyway it’s going to cost them money.

Over at Renault, the German BEV incentives have created the situation that you could actually drive a brand new Zoe for free (under certain conditions):
https://www.autohaus-koenig.de/neuwagen/renault/zoe/1046/
So forget about that Twingo…

Lars
23 days ago

It must mean that Renault expects to be able to sell the Twingo ZE at that price. Volkswagen priced their triplets lower, but they sold to well and now they are no longer available. I think this will continue as long as people buy the overpriced BEV Just look at the Mini, the Fiat 500e, the Honda e, they are larger than the Twingo, but they are also priced considerable higher.
Another problem with the subsidies is that they make the BEV more expensive in other countries. In Germany people get over 9000 Euros, here in Denmark we only get a tax cut. The ID.3 will start in Germany at 30.000 Euro before subsidies, in Denmark it starts at over 37.000 Euro after tax cut.

23 days ago
Reply to  Lars

Fortunately Renault occasionally offers great discounts for the ZOE, it might also happen with the Twingo ZE.

Famlin
23 days ago

With these dimensions, Renault Twingo is a very small car and price of 24.790,01 euros (including VAT) is prohibitively expensive. Its correct, the corporations just pocket the subsidies (100%) without passing any benefit to customer.

Had Carlos Ghosn been chairman, this would not have happened.
Renaults profitability has suffered along with Nissan. They dont seem to realize the upcoming wave of BEVs from new challengers.

It will be nice if the governments set a 1-2 year timetable to scrap all the subsidies and see what these automakers does.
Length 3,590 mm (141.3 in)
Width 1,640 mm (64.6 in)
Height 1,550 mm (61.0 in)

dipole
23 days ago
Reply to  Famlin

It is not that it is a small car, it is that the development costs are already covered/sunk. It was released in 2013 as a petrol car. The smart forfour is basically the same drivetrain.
The motor is a detuned version of the Zoe motor. Same for the charger. The battery is using industry standard technology.
With a Twingo costing less than 10000 new in Germany this car really shouldn’t be costing more than 15,000 with only a 22kwh battery in it. On mobile.de brand new twingos are being offered for 7750 with a range of about 700km out of a 35 litre petrol tank.
This EV pricing strategy is pure price gouging.

The same applies to the Zoe which was released in 2012 with minimal investment since then. The development costs are sunk.

I won’t be replacing my Zoe with another one when I place an order later this year.

VW are price gouging on the ID3 too but in their very limited defence at least they have to recoup the development costs on what is still a niche product.

Buutvrij
23 days ago

I miss red the beginning of the article and thought that euro 20/21k was allready redicilous. Then, it turns out, it’s acually more expensive!!!
Let the Chinese take over the EU caremarket Renault?

Sandro
23 days ago
Reply to  Buutvrij

I am really waiting for Chinese BEVs automaker to come to Europe. When they will come???

22 days ago
Reply to  Sandro

I think that BYD will bring its affordable models e1 and e2 to Europe next year. ORA will also eventually arrive with affordable models, such as the R1 and R2.

When the alternatives arrive, European automakers will magically drop the prices of their overpriced electric cars by 10.000 euros…

Marcel
22 days ago
Reply to  Pedro Lima

I hope you’re right. Will European automakers get the government to apply anti-dumping regulations against the Chinese imports like they did against solar panels and electric bikes?

Freddy
22 days ago
Reply to  Marcel

The poblem is that not always is official dumping… Chinese manufacture a lot and very affordably…. You just have to check the prices they sell cars there… it is not everything subsidized or dumped…

Wake Up Europe… At least in the US they have Tesla with sedans and medium large Suv’s that are very stronh, but in Europe what we need is city (A) sub-compact (B), compact (C) and estates and SUV’s although i dont like them (B,C,D)… and currently there are no such cars at affordable/competitive prices…If Chinese enter the market strong, it will be fast and painful for European manufacturers, namely the ones mostly focused on Europe like the french (PSA, Renault)…

Just my 2 cents

Mister muttley
16 days ago
Reply to  Marcel

Yep, the german car industry will lobby against them. There will then either be qoutas or import taxes on them, so they can continue to sell their overpriced EV’s. China might not take lightly to it though. I’ll get popcorn!

Tyler
18 days ago
Reply to  Pedro Lima

ORA will also eventually arrive with affordable models, such as the R1 and R2.

Did they make an announcement about this?

Blablubb
23 days ago

As you point out, the combination of regulation and generous subsidies makes no sense. Since automakers need to sell EVs anyways (to make emission targets), the subsidies are not necessary to reach the goal. Instead manufacturers just pocket them by artificial inflation of their list prices, which will hurt consumers in the long run and continuous to solidify the image the EVs are expensive

22 days ago
Reply to  Blablubb

Indeed, I still don’t understand why so many people in the EV community like this kind of subsidies. They are counterproductive.

The most efficient policy is to tax ICE cars even more and eventually ban them from entering urban areas, but this could cost some votes if not explained correctly to voters…

Last edited 22 days ago by Pedro Lima
Leo B
22 days ago
Reply to  Pedro Lima

We have a incentive scheme that seems to work: a quotum.

This year the EU lowered the fleet average CO2-emission for manufacturers to 95 gr/km. This number is not achievable with ICE-only models, so it basically works as quotum for PHEV’s and BEV’s. And what’s happening? Suddenly manufacturers produce PHEV’s in large numbers.

A very quick ‘back-of-the-envelope’ calculation shows that with current ICE CO2 average (about 120 gr/km in 2019) about 10% of sales should be BEV’s to avoid penalties, or 20% PHEV. With some rule relaxations in place, real percentages are a bit lower.

If you really want a quick transition to BEV’s, simply introduce a BEV quotum. Make sure the quotum is ahead of the demand curve, so manufacturers actually have to make BEV’s attractive to buy. And if a manufacturer drops below the quotum percentage, put all ICE sales on hold, until the required quotum is reached again.

The CO2 regulation show that legacy manufacturers only respond when severe pressure is applied. And then many of them deliver. So let’s apply the pressure.

22 days ago
Reply to  Leo B

True.

Marcel
22 days ago
Reply to  Leo B

good points.

Marcel
22 days ago
Reply to  Pedro Lima

The problem is political. EV incentives are much more politically palatable than ICE taxes. No politician can be seen to be raising taxes. Here in Canada, the Liberal government has taken a huge amount of attacks from the right over a relatively weak carbon tax, even though most Canadians actually want some kind of action on emissions. Our carbon tax even has a significant rebate for individuals, so lower income people don’t actually pay much carbon tax at all.

Marcel
22 days ago
Reply to  Marcel

I think the province of Quebec has an EV mandate though, so there are regulations on top of incentives. EVs sell very well there.

22 days ago
Reply to  Marcel

In Portugal is the same thing, the center-left government gets politically attacked every time there’s an increase of taxes on fossil fuels, even by left-wing parties, which as a leftist I don’t understand…

dipole
2 days ago
Reply to  Pedro Lima

With 10k rebate in Germany it is not that expensive but the Chinese L1 Smart Clone shows it is still overpriced.
https://www.youtube.com/watch?v=RPTR3huuoCk

Famlin
22 days ago

Subsidies made sense when battery prices were at $1.200 / KWh in 2010 timeline.
Last year end, it was $156 / KWh and its just waste of money. May be for few months to recover from corona virus, the governments can give subsidy. By the end of this year, it should be removed. I am sure China will also do the same.

Time for USA to remove the $7,500 subsidy since Tesla could sell very well without any subsidies.

Famlin
22 days ago

If L2 (240 Volts) charging station costs € 2.000 to install, they can install 5 charging stations instead of giving € 10.000 subsidy per vehicle.

This way, the customers get to use the charging stations for a long time instead of automakers pocketing the subsidy.

In USA, there are 26.166 charging stations with 83.994 charging ports.
https://afdc.energy.gov/stations/states
Charging stations are fast catching up with the gas stations whose count stands at 110.000 at the end of 2012 and it should gone down even lower by now.

Gustaf
22 days ago

This is concerning.. It makes me Worry about buying an Electric car now because what Will happen with resale Value if manufacturers give up and start suppyling cheaper ev’s in a few years? Do you have data for pricing of ice vs ev cars in china? I am aware that it is expansive to register an ice car in china but what about selling price? I Assume there are plenty of oem’s that truely want to sell ev’s in china which means the Prices may be pushed down?

Rooster-X
20 days ago
Reply to  Gustaf

I would not worry Gustaf, as electric car demand outsrtips supply prices will always be high. Here in the UK last year it cost the same for a 2nd hand R90 Zoe compared to a brand new R110 Zoe, as you would expect I bought a brand new R110.