Renault faces battle over used EV values

Renault faces a major battle with one of the leading companies that sets secondhand values for cars over its plans to lease the batteries in the four electric vehicles it will bring to the UK from 2011.

Cap Monitor says it will not issue predicted second-hand valuations on cars that are part-owned by the user and part-owned by the manufacturer because of concerns over divided claims in the event of an accident.

That could cause problems for Renault when it starts to sell its electric cars, as depreciation (the amount of value a car loses over time) is the biggest single cost involved in running any car and is a crucial part of the calculations performed by companies when setting lease and contract hire rates.

Without predicted second-hand values, these companies could set punitive rates that effectively make the car an unrealistic ownership proposition.

Nevertheless, at the Paris motor show, Renault confirmed that it will sell its electric vehicles, but lease the batteries. Thierry Koskas, director of the companys electric vehicle programme, believes this removes doubt for the customer over the life and costs of batteries.

Battery technology is new technology, he said. A car that is not sold with its battery after three years will surely have more value than one sold with.

He added, We are committed to making our own batteries within the [Renault-Nissan] Alliance. It will be part of our strength to control the battery technology.

Renault will introduce an electric version of the Kangoo light van in 2011, a four-wheeled electric scooter called the Twizy at the start of 2012, a four-door electric saloon, the Fluence, a few months later, and an electric supermini, the Zoe, at the end of 2012. All four are on display at Paris the Zoe in 90% production-ready form.

A Fluence will cost just under 20,000 before Government incentives, and the batteries will be leased for a little over 70 a month the cost of a tank of diesel in an average family car. Renault promises that a Zoe will cost the same as a diesel Clio after the Government contribution, with a similarly low battery leasing cost.

While the Kangoo and Fluence are built on existing Renault platforms, the Twizy and Zoe use new purpose-built architecture. The Twizy will be sold as a quadricycle, which means it will not have to pass Euro NCAP crash tests, although Renault says it will be far safer than the scooters it will match in price.

There is a reason why electric cars are expensive today, and that is because of volume, says Koskas, but as volumes go up, they will become less expensive. Renault expects around 10% of its sales volume currently 2.5 million vehicles a year will come from EVs by 2020.