The CEO of the Losanga group underlines that the heat engine can still be refined. He commends the Chinese manufacturers for their lucid vision of the situation. And remember one of the lessons learned by Sergio Marchionne
Without controversy, but with the common sense of a head of a company, he dwells on “technological neutrality” while remembering that the rules are respected. Luca de Meo has led the Renault group (110,000 employees, 2.7 million cars sold in 2021, present in 130 countries) since July 2020 as CEO. He does it in a historical phase of profound transformation of the sector. On the electric, he has no doubts that it will be a good part of the future of the car and on the subject Renault has a wealth of over 10 years of experience. However, the thermal can still be refined, the numbers show that the margins are there. To date, however, the request of the European Commission is to close with combustion engines in 2035. It is one of the many challenges that the four wheels with which the Italian manager lives every day, also strengthened by the school made with Sergio Marchionne.
Luca de Meo what are the challenges that the car must face and overcome between now and the next 10 years?
“How many interview hours do we have?” laughs.
Do we make 20 words (approximately)?
“The industry is in a great phase of transformation. We are at the crossroads of two basic trends. One is the energy transition and the other is digitalization, not only in the car, but also in the company.”
“The whole transition to electric, rather than hydrogen and the idea that the car becomes an intelligent, connected, self-driving object, happens in our sector more than in others. This forces us and pushes us to completely review the value chain, the business model, the type of technologies we need to become proficient in, the organization of work, the allocation of capital. From a certain point of view it is a fantastic time. After 30 years of cars I thought that I would have been bored. I worked on 80-90 models in various brands and, instead, every day you learn something new “.
The European Commission proposes a stop to sales of thermal cars from 2035. Now the proposal is in the crucial phase of confrontation between the Commission, the Council and the European Parliament, the so-called trilogue. Are you expecting a result that can follow the decision just taken by California to leave a 20% share reserved for plug-in hybrids after 2035? What does it foresee?
“Without vis-a-vis controversy, I say that we must leave open the possibility for technicians and engineers to find the solution, with the authorities telling us where to get to with the emissions but not exactly how. The principle of technological neutrality, normally underlying any type of regulation , it should apply here as well. We have no doubt that the electric is a good part of the future of the car, which is a very interesting solution from many points of view. On this Renault has an advantage of experience and could take advantage of the discontinuity of this regulation. But as in Formula 1 we need a plan A, a plan B and a plan C. So we will need to develop alternatives. I consider that the combustion engine still has room for improvement especially from the point of view of fuels that you are capable of injecting into these engines “.
“I’ll give you an example. The engine we installed in the Austral, which will be launched before the end of the year also in Italy, is a 1,200 three-cylinder hybrid with 200 Hp. The emissions are about 103-104 g of CO2 per km. and it has an energy efficiency of around 44% which is higher than that of a diesel. We were told five years ago that we were capable of building a petrol engine with an energy efficiency of 44% no one would have believed it. done by applying the concept with which we move the hybrids of Formula 1, without the gearbox and with electric motors. It’s a genius but it comes out because people apply to it and have the possibility to do it. A Formula 1 engine has an efficiency around 50%, so from 44 there is still some margin. Then our style is to adapt to the regulations without resisting them but we would like not to make such a speech in black and white because in the world there are grays, shades different”.
An important part of microchips and batteries come from China. Chinese manufacturers themselves, traditional and non-traditional, have demonstrated skills in the electric car. So how does a large non-Chinese manufacturer move?
“The work done by the car manufacturers in China is absolutely admirable. They have had an impressive ability to manage the development of technology, particularly with the electric. As European manufacturers we have another formidable competitor as we have had with the Japanese, with the Koreans and tomorrow maybe with the Indians. However we are still here and we are doing quite well despite the difficulties of the case. It is clear that with the switch to electric the Chinese manufacturers see an opportunity to catch up on the combustion engine that they would not have never been able to fill it. For them it is worth going directly to 5G. This demonstrates an important lucidity on the part of that economic system “.
There is the issue of the supply of raw materials in which China has the advantage.
“This is an issue that will change the geopolitical map of the world and on which China and some Asian countries have their hand: on mines, refining processes, etc., etc. Europe is led to react and anticipate these movements and to regain some control of this value chain: it will be an important part of the success in our sector. We in the north of France are creating a fully integrated electric car production platform with battery factories, assembly lines and so on. Renault it is proof that the Europeans are also in the match. May the best win. “
An important lesson that you learned from Sergio Marchionne and an aspect of his way of running a company that can be reviewed or that is no longer current?
“I’m not particularly objective when I talk about Sergio Marchionne because I owe a lot to this person. I learned hundreds of things from him. Surely what he excelled at was the ability to see systems and seize opportunities from a structural point of view. of the company, of its governance, of its organization to create value. Now that at Renault we are trying to reinvent ourselves to remain attached to the value chain of the future, many times (he has a hesitation in his voice that betrays the emotion, ed) I think that I have already seen certain things do. What has perhaps changed is the approach to putting systems together (merging different companies, ed), or the idea of looking for volume, size, to build efficiency in the system. It has been the mantra in the automotive world for many years: the older you were, the better off you were. I believe that the world is changing and that we must add to this the ability to manage a very evolutionary scenario. A system of ever larger builders is certainly a valid strategy but it is when you have a stable, or growing demand, and you operate on a technology that is mature, that you know and like. The world that we will live in the next 10 years, in our sector, is very volatile in which technology is very evolving, both on software and on batteries. You have to be able to structure an agile organization that can flexibly manage the volatility of the system and very oriented towards innovation because you have to hit the good updrafts “.
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