Automotive News Europe — 2024-04-03
Automotive Industry
The vans are on a dedicated 'skateboard' chassis. No price was revealed but executives are emphasizing lower cost of ownership versus diesel vans.
Flexis, a new electric-van joint venture of Renault Group and truck maker Volvo Group, will sell vehicles under the Renault and Renault Trucks brands, and possibly Nissan, executives said.
Each company is investing €300 m ($323 m) in the new company, which will begin production in early 2026 at Renault’s factory in Sandouville, northern France.
The third partner in Flexis is CMA CGM, a French shipping and logistics company, which will invest €120 m for a 10% stake.
Flexis will offer an “ecosystem” of services that includes the vans, connectivity, software and potentially maintenance and updates, Renault Group CEO Luca de Meo said Wednesday, 3 April 2024, at an event in Paris to launch the company. Sales will be exclusively business-to-business (B2B) rather than to private customers.
A key target market is “last mile” deliveries in urban areas, which are placing increasing restrictions on diesel vehicles. Flexis says the full-electric van market is poised to grow by 30 to 40% a year through 2030, although market share last year was 7.4%, about half that of electric passenger cars.
De Meo and Volvo Group CEO Martin Lundstedt would not reveal a target price for the vans, which will be compact sized and derived from a Renault concept called EZ-Flex. Recent news releases have referred to it as the FlexEVan but the name has not been finalized.
Focus on running costs
De Meo said the vans would probably be more expensive than a diesel Trafic midsize van, but he said that business customers were more focused on total cost of ownership (TCO) than list price. A diesel Trafic starts at about €31,000 in France.
“Professional customers don’t look at price, they look at TCO,” he said. The Flexis business model, with its mix of product and connected services, can reduce TCO by 30% over comparable ICE models, he and Lundstedt said.
The executives described electric van ownership as “Capex heavy and Opex light,” meaning the initial price might be higher than a diesel van, but operating expenses substantially lower. “The more you drive, the lower the cost,” Lundstedt said.
De Meo said the company would be profitable, but he refused to disclose a margin or production target.
Volvo Group is a separate entity from Volvo Cars and is the parent company of Renault Trucks, which itself is separate from Renault Group. Volvo Group and Renault Trucks provide distribution services for Renault’s Trafic and Master vans.
Dedicated 'skateboard' chassis
Flexis did not release details about the vans other than to say they will be built on a dedicated modular “skateboard” EV chassis. Philippe Divry, the newly named CEO of Flexis, said it would have ergonomic innovations that would help reduce strain on drivers, many of whom quit after 12 to 18 months on the job. The platform also enables the vans to have the turning circle of a small car, he said.
Krishnan Sundarajan, the COO of Flexis, said the skateboard platform has been in development for three years. The vans will have two types of battery chemistry, he said on the sidelines of the event: Lithium iron phosphate (LFP), for lower-cost and shorter-range applications; and nickel manganese cobalt (NMC), for longer range. The NMC batteries will come from Verkor, a startup that is backed by Renault, Sundarajan said.
Renault currently sells a full range of electric vans, including the compact Kangoo, the medium Traffic and the large Master. The Flexis vans will help make up for lost volume from former partnerships with Fiat and Opel, which have become part of Stellantis, de Meo said, who added that light-commercial vehicles made up about 20% of Renault Group’s financial turnover.
“It’s a very substantial part of our business, so I have to reinvent it,” he said about commercial vans.
In addition to Renault- and Renault trucks-branded vans, Flexis will offer “white label” vehicles for other partners, similar to the brown UPS delivery vans seen in the US, de Meo and Lundstedt said.
Competition from China
Flexis vans could also be a preemptive strike against low-cost electric vans from China, which have not yet reached the European market in significant numbers, the executives said. “We need to be competitive in the long run, no matter what protections are in place,” Lundstedt said.
Electric-van startups have faced a rocky road in recent years. Those that have struggled include StreetScooter, Arrival, Canoo and Rivian (which has pivoted to pickups and SUVs).
De Meo and Lundstedt said Flexis had a better chance to succeed because it was starting with existing production, technological and customer bases.
Overall commercial van sales in the EU were up nearly 15% in 2023, according to the lobbying group ACEA; they generally make up about 10% of the light vehicle market in Europe.
By powertrain, diesel continued to dominate with an 83% share; full-electric vans made up 7.4%, ACEA said, with gasoline at 6.3%. The EV share represented a 56% gain over 2022.