Renault is thinking about setting up an electric vehicle for the mass market in India, according to a report by Reuters quoting information from people familiar with the ongoing review. This is a part of a renewed push of the French carmaker into a market where EV adoption is expected to grow quickly from a low base.

The Renault study demonstrates how the French automaker is pushing ahead with electrification plans even as it continues to negotiate with its partner Nissan Motor about investing in an EV unit that it plans to separate from its other operations.

It also reflects a shift in perception of India’s auto market, which is expected to grow at the fastest rate of any major market in 2022.

EVs were on track to account for less than 1% of car sales last year, but the government has set a target of 30% by 2030 and has recently been successful in attracting suppliers for international automakers through a variety of subsidies.

According to Reuters, Renault is considering launching an electric version of its Kwid hatchback made in India.

One of the people said the review will look at potential demand, pricing, and the ability to build the EV with local components, and that any launch would be in late 2024.

According to the person, the move is part of Renault’s larger plan to rekindle sales in a country where the carmaker remains profitable despite selling fewer cars in 2022 than the previous year.

Renault India declined to comment on product plans, but stated that the company has a “strong focus on electrification globally” as part of CEO Luca de Meo’s strategy, and that “India is one of the key markets” for the group.

According to S&P Global Mobility, India will overtake Japan as the world’s third-largest market for passenger and other light vehicles. In 2022, industry sales are expected to increase by 23% to 4.4 million vehicles.

In contrast, the outlook for the United States, where the market is expected to remain below 2019 levels next year, and China, where demand is weakening, are both negative.

Renault had hoped to reach an agreement with Nissan in December on the terms of a carve-out for its EV unit, but talks have stalled due to the Japanese automaker’s concerns about a variety of issues, including intellectual property protection.

“India will play an important role in future projects of Renault-Nissan but local plans will not be finalised before a global deal on a restructuring of the alliance is reached,” said one of the sources.

Domestic carmaker Tata Motors, which dominates electric vehicle sales in India, as well as foreign players Stellantis, Hyundai Motor, and SAIC’s MG Motor, are planning EV launches.

Renault already manufactures a version of the Kwid EV in China, which is known as the City K-ZE and is exported to France as the Dacia Spring. The Spring, France’s second most popular EV in 2022, has a range of 230 kilometers and a starting price of 20,800 euros ($21,869) before government subsidies.

Renault would have to build the car at its alliance plant in southern India and source components locally to qualify for incentives in India, according to the first person. Nissan owns the majority of the India plant.

Nissan has refused to comment.

In India, Renault currently manufactures the Kwid hatchback, Kiger SUV, and seven-seater Triber. Its sales fell 9% to around 87,000 units in 2022, and its market share fell to slightly more than 2%.

Renault also plans to refurbish and upgrade some of its major dealerships in major cities as part of the India reboot, according to the source. According to the company, it has 500 sales outlets in India.

(Adapted from Reuters.com)