Business 04/10/2021

Renault wants to get involved in the battery plant macro-project

French company's interest delays activation of European funds for automotive sector

3 min
The French company Renault, in an archive image.

BarcelonaThe French company Renault does not want to miss out on one of the most important macro-projects driving the Spanish automotive sector in recent years: the first battery plant for electric cars in Spain. It will be the star infrastructure of the Strategic Project for the Recovery and Economic Transformation, known as PERTE, in the automotive sector.

The Minister of Industry, Reyes Maroto, was due to announce the macro-project in March, when she said that the central executive would go ahead together with the automotive group Volkswagen and energy company Iberdrola. But, as ARA has learnt from several sources in the sector, Renault has also shown interest and is holding talks with Pedro Sánchez's government. The person in charge of carrying out the negotiations Renault CEO Luca de Meo, who has a very close relationship with Spain, since he held the presidency of Seat for five years. De Meo left the carmaker at the beginning of 2020 to join Renault. During his time in Spain, De Meo always showed good harmony with both the central executive and the royal household, which was staged in several official acts. Renault spokesmen, who neither confirm nor deny the negotiations, simply say that until the company has not seen all the details about PERTE it will not make a decision on the battery factory.

Without electric cars in Spain

The same sources explain that the main problem of Renault's participation in this macro-project is that the French company is not manufacturing electric vehicles in any of the plants it has in Spain because it will concentrate all its electric car production in France.

The four factories that the French group has in Spain have a safe future until 2025 thanks to the allocation of five new hybrid vehicles, a new engine and a new gearbox. Three of the vehicles will be assembled in Palencia and the other two in Valladolid, while the new engine and gearbox will be manufactured in the Valladolid and Seville plants respectively. These plans were explained by De Meo himself in March at an event presided over by Felipe VI and Pedro Sánchez.

The sources also confirm that, whether Renault takes part or not, Volkswagen group's presence at the battery factory is not in danger, despite also being an automaker. What remains unknown is the location of the plant. With Catalonia practically off the cards, the regions that are most often mentioned are Extremadura, Aragon and Valencia.

PERTE plans to mobilise an investment of €24bn between 2021 and 2023, of which €4.3bn will be public (financed with European Next Generation funds) to promote electric vehicles. José Vicente de los Mozos, president of the Association of Automobile and Truck Manufacturers (Anfac), the sector's employers, complained last Thursday during the Barcelona Automobile Fair about the delay in the publication of the plan's details. Industry sources point out that precisely Renault's negotiations with the central government are one of the main reasons for this delay.

The Ministry of Industry claims that the bases of the call are already being prepared and insist that they do not know which companies will apply because it is open to all companies. The president of the Spanish government promised on Thursday, also from Barcelona, to complete the plan before the end of this year. The Minister of Industry made the same promise the next day. "We hope to publish it before the end of the year to ensure the plan is deployed in all its magnitude," said Reyes Maroto. With three months to go before the end of the year, the minister also specified where they are at: "We are working on the call for the comprehensive programme for the development of the industrial value chain of electric and connected vehicles".

The keys

1. Who is leading the project for the first battery factory for electric cars?

The central government itself, together with Volkswagen group and energy company Iberdrola, are the promoters of the plant, which will be the first of its kind in Spain. In fact, it is the most important infrastructure foreseen by the Strategic Project for the Recovery and Economic Transformation (PERTE) of the automotive industry.

2. What is the main obstacle for Renault to become part of this project? 

Renault will not manufacture any electric models in the four factories it has in Spain at least until after 2025. In fact, the French group has announced this year that five more vehicles will be made in Spanish factories, but all will be hybrids.

3. What is Renault's strong point in this negotiation? 

Luca de Meo, CEO of the French group, was also president of Seat in Martorell for five years. During this period he always maintained a good relationship with the central government and the royal family. He is carrying out the negotiations personally.

4. What is Renault's production in Spain? 

The French group manufactures more than 12% of its annual production in Spain. In 2019, before the pandemic broke out, it made 477,128 vehicles in the state; last year, due to covid, the figure fell to 342,557. Its most important factory is located in Palencia. It also has plants in Valladolid (two) and Seville. In total, it has about 10,000 workers in Spain (Seat has about 15,000).