In many markets, the subcompact cars – known as B-segment or supermini cars in Europe – are a dying breed. Sure, in several countries on the Old continent these are still the dominating types of new vehicles, but there are many regions where small crossovers are the new norm for city driving. With roughly 2.25 million sales combined in 2020, though, the B-segment is something manufacturers in Europe are still interested in.
Further adding to the increasing complexity of small cars, the continent is planning strict new emissions standards. The Euro 7 regulations expected to become effective from the end of 2025 pose yet another problem for the combustion-powered B-segment models. And this could mean they will get more expensive. Much more expensive, actually.
Luca de Meo, Renault Group boss, recently had a chat with Autocar and discussed many different topics – from the automaker’s new electric-focused strategy to the situation in the supermini segment. And it’s not looking bright, to say the least, as these cars are so close to being unprofitable. Things can change for the better, though.
“There’s an entry price to clean up any combustion engine,” he told the British publication. “You need a particulate filter containing platinum, rhodium, and other expensive stuff, whether it goes onto a €15,000 Clio or a €120,000 Mercedes S-Class. Sure, the S-Class filter is a bit larger, but it’s much cheaper in percentage terms and the customer can afford to pay. But life is getting very hard for companies making small cars.”
Without getting deep into other details, de Meo told Autocar superminis with combustion engines could double in price once the Euro 7 standard kicks in. What’s the solution? Renault’s CEO believes electric power is the answer here.
“Meanwhile, the cost of batteries is falling at about 10 percent a year, according to our experience. And small electric cars need smaller batteries, so they’re even cheaper in percentage terms than family-sized EVs. As combustion small car prices rise, the equivalent EV falls. The moment is approaching when the two cost curves will cross – at which point the electric car will become the more viable in Europe,” he explained.