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Plugging in Renault: What it Means, and What Carlos Tavares Has to Do

Carlos Tavares: bringing Nissan experience to Renault
Nissan has gotten the attention for plugging in with the battery-powered Leaf, but its alliance partner Renault actually has the more ambitious electrification strategy -- with not one but a family of four cars. If you've never heard of Renault's electric cars, that's partly because the French company doesn't sell cars in the U.S. But it's also because Renault isn't nearly as good at promoting plug-ins as Nissan has been.

The key figure behind the high-visibility Leaf campaign is Carlos Tavares, the Nissan executive who was elevated to the number two position of chief operating officer at partner Renault this week. He has his job cut out for him -- convincing skeptical Europeans (who usually think diesel when they think green) that plugging in is the way to go, and arranging public charging networks on a continent where there's not even agreement on a standard plug design.

Renault has big growth goals, despite lingering effects of the Japanese earthquakes and a corporate espionage scandal over electric car secrets that caused the downfall of Tavares' predecessor, Patrick Peralta (and tarred the reputation of Carlos Ghosn, who heads the Renault-Nissan Alliance). Tavares, who led Nissan Americas and shuttled between the U.S., Tokyo and South American capitals, escaped involvement in the long-simmering theft of secrets case, which turned out to be a seamy hoax.

Renault's profits are up
Despite leadership issues, Renault isn't the sick man of Europe; it posted a 15 percent rise in first-quarter sales last month, which exceeded forecasts. But the company experienced some slowdown because of Japan-related parts slowdowns, and that led to predictions from finance chief Dominique Thormann that its international growth for 2011 will be below six percent. Facing weakening demand at home, Renault is also pushing hard to expand into Brazil -- so Tavares' fluent Portuguese and long experience in Nissan's South American operations should come in handy.

Today, a rudderless Renault needs a charismatic leader who can not only advance its landmark alliance with Nissan, but also push the back-to-back EV launches, which start late this year and extend into 2012. The plan is designed to put thousands of battery cars on the road in Europe and beyond -- but it's gotten off to a slow start.

A family of plug-in cars
The Renault electric cars are all just potential right now. They include the Leaf-like Fluence Z.E. (which has swappable batteries that enables a partnership with the aggressive charging company Better Place in Israel and Denmark), the ultra-compact urban runabout Twizy, the Kangoo Express panel van and a smaller five-seat EV based on the Zoe Preview concept car.

The Fluence Z.E. ("zero emission"), to be built in Turkey, is the first plug-in Renault on the market, but don't expect to see many on the Avenue des Champs-Élysées. Better Place has ordered 100,000 of them, but so far only a few of those cars have hit the road in Denmark. The big rollout in Israel is scheduled for later this year, with the cars priced at $34,000 and a plan that includes a four-year service and charging contract with Better Place.

The Fluence Z.E. has mostly been defined by its relationship with Better Place, but it needs a distinctly European identity and high visibility if it's going to thrive on the continent -- where it actually has to compete with the Leaf.

All of these cars are scheduled to roll out by the middle of next year. Increasing their profile is certainly a do-able task, because Europe has super-high gas prices, shorter travel distances, and EV-friendly governments. But there isn't much consumer awareness of EVs in Europe yet.

Meanwhile, Nissan has been very successful in promoting the Leaf, which is definitely the best-known EV on the U.S. market. A relentless schedule of public events helped, and that strategy needs to be transferred to Europe. When Nissan took the Leaf on American road tours, it was frequently Tavares who rode along, and made himself available for media interviews, like this one I did with him for BNET in 2009:

Hands-on management

Renault needs a really visible executive who's also a bit of a showman and not afraid of a street fight. Ghosn is certainly all of that, but he's spread thin. Tavares, the other Carlos, is cut from the same mold and the two are close. Tavares was Ghosn's surrogate when General Motors started airing its "More Car Than Electric" Chevrolet Volt commercials, implying that cars like the battery electric Leaf don't have enough range (100 miles) for footloose Americans. Tavares counter-attacked, with a muffler and tailpipe as props. He told the Automotive News World Congress in January:

As automakers, we have a duty to communicate with clarity to help customers understand today's technology. If you're calling your car electric, and it has one of these, you're only muddling the message.
It's a pity that Renault doesn't sell cars in the U.S., because Tavares has built a wealth of experience about marketing cars to America. But he'll certainly be a cornerstone of any plan to re-enter the U.S. market.

Tavares is well aware that EVs are a long-term strategy that didn't support irrational exuberance, with a payoff somewhere on the horizon. He told me:

We are prepared to make a profitable business once it reaches a certain level. We don't expect to start making a profit immediately, but we certainly see a business case. We are shifting completely from internal combustion, and we can't expect that electric vehicles will have the same profitability that gas cars have after 100 years of development.
A 23-year veteran of engineering teams at Renault before he went to Nissan in 2004, Tavares knows the French carmaker's quirks and corporate culture. And because he was Nissan's chief cheerleader for the Leaf and made frequent trips to Japan, he's familiar with the shared technology under the skin of Renault's family of EVs.

Despite his caveats, however, if Renault's EVs fail to make money in Europe, Tavares and his team will probably be the fall guys. That comes with the territory.


Photo: Jim Motavalli