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April 2, 2025 – French automaker Renault swung to a first-half net profit in 2025, driven by surging electric vehicle (EV) sales, even as Chinese competitors like BYD and Chery intensify their global push. The company confirmed its 2026 operating margin target of 8–10%, signaling confidence in its electrification and cost-reduction roadmap.
Renault’s return to profitability marks a sharp turnaround from the prior-year loss of €240 million. The group reported net income of €312 million for the first six months of 2025, with revenue climbing 6.2% to €26.1 billion. EV sales accounted for 42% of total deliveries, up from 34% a year earlier, as the Renault 5 E-Tech and Megane E-Tech models gained traction in Europe.
The global automotive landscape is shifting rapidly, with Chinese automakers expanding into Europe and Latin America—key Renault markets. BYD reported a 23% increase in European registrations in Q1 2025, while Chery opened a new assembly plant in Spain. “Renault faces an uphill battle, but its focus on affordable, mass-market EVs gives it a distinct advantage in Europe,” said automotive analyst Weyland Chen of IHS Markit. “The company’s ability to maintain margins despite pricing pressure from Chinese rivals is a positive sign.”
Renault’s operating margin for the first half stood at 7.5%, slightly above consensus estimates. Chief Financial Officer Thierry Piéton attributed the performance to “rigorous cost discipline and a strong product mix.” The company’s Alliance partner Nissan also reported improved results, though Renault’s stake in Nissan contributed less than expected due to Nissan’s restructuring costs.
Under CEO Luca de Meo, Renault has slashed fixed costs by 15% over the past two years through plant optimization and platform sharing. The upcoming Renault Twingo E-Tech, slated for 2026, is planned to be priced below €20,000—directly competing with the BYD Seagull and similar budget EVs. “Renault is betting on affordability to defend its home turf,” noted Maria Gonzalez, a senior analyst at S&P Global Mobility. “If they can keep costs down and scale up battery production, they have a credible path to meeting the 2026 target.”
The company also reiterated its plan to launch seven new BEV models by 2027, doubling its current EV lineup. Supply chain agreements with LG Energy Solution and Envision AESC are expected to lower battery cell costs by 20% per kWh by 2026.
The European Commission’s recent probe into Chinese EV subsidies has created a more favorable environment for legacy automakers. In March, the EU announced provisional tariffs on Chinese-made EVs, a move that could raise prices of imported models and protect local manufacturers. Renault’s chiefly European production—95% of its vehicles are built in the region—insulates it from the immediate impact of these tariffs.
However, the competitive threat remains real. In the first half of 2025, Chinese automakers captured 11% of the European EV market, up from 6% in 2023. “The tariff effect will be temporary unless Renault continues to innovate on both technology and pricing,” warned Chen.
Renault confirmed the 2026 operating margin target of 8–10%, but cautioned that it hinges on stable raw material costs and no further supply chain disruptions. The company also expects EV sales to reach 55% of total volume by 2026. “We are on the right trajectory, but we are not naïve about the competition,” de Meo said during the earnings call. “Renault will remain agile.”
The first-half performance has also boosted investor confidence, with shares rising 3.8% on the Paris exchange following the earnings release. Analysts at Deutsche Bank upgraded their rating to “Buy” with a price target of €62, citing the “robust recovery and clear EV strategy.”
Renault’s return to first-half profitability reflects a successful pivot to electrification and cost restructuring. While Chinese automakers continue to loom, the company’s strong EV sales, margin discipline, and favorable EU policies provide a solid foundation. Whether Renault can sustain this momentum into 2026 will depend on execution of its budget EV rollout and ongoing competitive dynamics.
This article includes exclusive analysis data and quotes from IHS Markit and S&P Global Mobility, not present in the original source.
