Ignacio Rodríguez-Solano (Renault Group): We Won’t Electrify Europe with €100,000 Cars

Spain is the second-largest automotive producer in Europe, but the shift to electric propulsion could alter its standing if action is not taken swiftly. Combustion and hybridization still account for the vast majority of the sector’s added value, while new sources of competitiveness—batteries, software, cells, refining, mining, and charging points—are advancing at a different pace and with a strong reliance on China. In this interview, Ignacio Rodríguez-Solano, director of the Renault Group Foundation in Spain, explains the sector’s positioning, which calls for an industrial strategy that blends climate ambition with economic realism. 2035 appears as a horizon, but ahead of it there is 2030, a first milestone that requires “clear flexibility measures.” Electrification, he says, must be carried out with small and midsize cars, which are the European industry’s natural space and the only way to reach the entire citizenry.

How do you see the evolution of the automotive sector in Spain and in Europe?

The moment is challenging. In recent years, some companies have had to scale back results. It’s like a well-built ship that sails smoothly but is approaching a cataract: we are getting closer to the edge.

The sector faces a very delicate situation. In 2026 we are essentially playing our future with the Automotive Package and the set of decisions that affect the industry. We have the opportunity—and the necessity—to make sound and rapid choices.

What would be the right and rapid decision you propose for the sector?

There are still elements to be closed in order to respond precisely. For example, in the Automotive Package there are points where the view is fairly unanimous, but in others it remains necessary to analyze the context well, understand the impacts, and work toward a final proposal that is truly the most positive for the sector.

“What is at stake is the European economic and social model that has sustained progress for more than a century”

Where there seems to be consensus is in the need to introduce greater flexibility. It is important to keep ambition in terms of development and technological progress, but to accompany it with that flexibility. And it is also key to adopt the necessary measures so that this European sector—not only the automotive sector but also the components sector—continues to be a driver of progress. Because we must not forget that what is at stake here is the European economic and social model that has sustained progress for more than a century.

Is China the main competitor?

Today China is the major competitor. It is probably the country in the world that plans the future most thoroughly, not only in industrial production. Moreover, due to its size, it is almost more of a region than a country. And it is a region that, when it moves forward and takes a step, does not retreat.

Almost two decades ago, China made a strategic choice: to bet on a vector of industrial strength—the electric vehicle. And not only the car, but with an integral view, upstream, of all the elements needed to develop that sector: trade agreements, access to raw materials, logistics, refining, and technological development.

In the end, the car is the deliverable, the delivery, but behind it there is a well-worked industrial and technological strategy for years. That is where China has positioned itself as the main competitor and where it has done things very well. It has also known how to mutualize risk, in part due to its political and social system.

And that is precisely where Europe is finding it harder to craft a formula that, within our values, can compete on equal terms. Because, today, we do not compete on equal terms.
 

Is electrification a mandatory bet or a strategic risk? Where are you in the European debate? In past years there was much emphasis on the Green Deal package, and now it seems interests are shifting. Some countries are more favorable and others less so toward electrification; or rather, more favorable but asking for more time, or less time. Where do you stand in this debate?

I think the final picture is clear today. The question is whether this transition is accomplished in an orderly fashion and whether we can discuss the pace and the methods.

Fundamentally, it is a technological question. All technological vectors—5G, the metaverse, artificial intelligence, or autonomous driving—are now inside a car. And in China, nearly 50,000 electric vehicles are produced each day. That allows them to scale technology, reduce costs, and accelerate development at a very high pace.

“When you reach that level of technological development, what is created is an industry with exceedingly high added value”

When you reach that level of technological development, what is created is an industry with exceedingly high added value. That translates into greater profits, better wages, higher tax revenue, and stronger economic growth. It is no longer just a matter of China, Europe, or Spain: it is a strategic technological question.

A few years ago the focus was more on the Green Deal. Today, emphasis has shifted toward competitiveness. But this does not mean replacing one objective with another, because the agenda remains valid. What we must do is to place competitiveness objectives on the same level as environmental objectives.

Is 2035 a good timeline for prohibiting internal combustion cars?

Before talking about 2035, I would say we have a huge challenge in 2030. We are already in 2026 and facing a complex situation in which we need clear flexibility measures to be able to surpass that first milestone and stay on the electrification path.

As for 2035, there is a Commission proposal on the table that contemplates a 90% reduction in tailpipe emissions, rather than 100%. It is a first step toward greater flexibility that preserves the original spirit and objectives; it does not mean going backward.

That is the line we should continue to push in Brussels: to find a path that allows us to move toward electric vehicles and technological development without jeopardizing industry competitiveness.

Today in Spain, out of the sector’s 85,000 million euros of added value, 79,000 million still come from combustion and hybridization. The leap to electrification is therefore substantial and requires time. After all, 2035 is a date. What we need are enabling conditions to arrive in the best possible way. And in Europe, the exact terms of that objective are still under discussion.
 

Has there been an invasion of the electric car from China? The average Spanish citizen perceives them as fast, good, beautiful, and affordable. And indeed, more and more Chinese electric cars are appearing in the Spanish market every day.

European vehicles remain considerably more expensive. It is clear that electrifying Europe with cars priced at around 100,000 euros is not feasible. We must electrify with small and midsize cars. The B and C segments: the compact car, the Renault Clio, the Renault Megane, this type of car—this is a European invention. We don’t see those segments in other regions of the world; perhaps Japan has similar segments, but not the United States.

It is a very European segment, tailored to the needs and habits of the European citizen. And it is in those segments, and by lowering prices, where we will be able to electrify the entire population.

And where will the price be lowered?

The main cost increases in an electric vehicle today are in software and the battery.

In the traditional world, the heart of the vehicle—the seat of most industrial knowledge—was the engine, something we controlled within our own value chain and craft. But when we talk about software and batteries, we are discussing chemical and energy components. Traditional manufacturers are not chemical or energy actors. Therefore we face the most decisive cost element of the vehicle without controlling its value chain, which is largely dominated by China.

“We must reach a point where the battery stops being a differential cost factor. To achieve this, it is crucial to develop production capacity in Europe and reduce prices”

We need to move toward a certain level of battery commoditization. Just as with a mobile phone, where the user does not know who manufactures the battery—and it isn’t decisive—we must reach a point where the battery no longer serves as a price differentiator. For that, it is key to develop production capacity in Europe and reduce prices, which will enable the first step in driving down the vehicle’s cost.

In parallel, there are also substantial efforts in the software field. These two elements—battery and software—are crucial to lowering costs and thus the final price.

Added to this is the price of energy, which becomes increasingly relevant as electrification progresses. In Spain, policies in recent years have allowed for a competitive electricity price, which has been a success. However, when this is reflected in regulated costs, much of this edge against other European countries is lost.

That is why it is necessary to find mechanisms that ensure that this competitive energy price is also reflected in the final bill, for both consumers and industry, whether in household consumption, in factories, or in vehicle charging.
 

Without Europe-made batteries, can we achieve the strategic autonomy needed within the European sphere? Or will we always depend on China? Is public backing truly enough to drive this battle?

This cannot be done by the public sector alone. It requires the private sector as well, and across multiple sectors, because this does not depend solely on the automotive industry. We need other industries and the public sector to get involved: alone we will not be able to win this battle.

Is current public support sufficient to pursue this race?

There is a clear public awareness; the supports exist and are positive, but we need more. In the short term, we are not yet in a position to achieve strategic autonomy and we continue to depend on trade agreements with China.

We must progress gradually, scaling up capabilities to gain autonomy. But remember that in the battery domain this dependence increases as we move further upstream in the value chain. There are assembly projects, production of packs and stacks, and even modules, though to a lesser extent. Yet in cell production there are practically no projects in Europe. And if we advance toward refining or mining—which form the base of that chain—the dependence on China is, today, total.

“Integrating the upper links of the value chain takes time: we are talking about refining or mining processes that can take years”

In the short term, this situation is inevitable. The objective must be to progressively reduce that dependence. But integrating the upper links of the value chain takes time: refining or mining processes can take years. In this context, initiatives like the European omnibus and regulatory simplification are key to speeding up that integration.

How should relations be designed so that we advance our interests while maintaining as equal terms as possible with China to avoid harming our ultimate objective?

There are mechanisms that can be put in place. We manufacturers are open to it, and I imagine the Government and other actors are as well, so that both sides benefit.

Just as European manufacturers who established themselves in China had to reach agreements with local partners, we must now craft mechanisms so that any company that invests here—whether Chinese or from any other country—creates added value in Europe.

And what can be done under those conditions? There are examples showing it is possible. Renault itself has a partner like Geely, with whom it has established a joint venture that leverages existing industrial capabilities, such as the Valladolid engine factory or the Sevilla gearbox plant. It optimizes the use of those facilities, integrates local suppliers, and drives innovation from local research centers as well, such as the one in Valladolid. In this way, value is created for both the investor and the local operators.

There are mechanisms. And, in that context, any investment that arrives in Europe will be welcome if it is structured to generate mutual benefits. That is the key.
 

There is concern among workers linked to the automotive sector about this modernization process and the introduction of technology. It is likely that the profile of the worker needed now, and even more so in the medium term, will require a much higher level of education and preparation. How do you address this?

It’s undeniable that manufacturing an electric vehicle is more technological and automated. A simple visit to an electric vehicle factory—say, of some Chinese manufacturers—suffices to see this.

That said, within the electrification process new value chains are emerging as well. Retraining is essential, but it must focus on competencies that workers can realistically adapt to. There are limits, but there are areas where this transition is possible, such as material recycling or the circular economy, which are emerging value chains with a long way to go.

In that area we still do not have all the solutions and there is much to develop, both from the public and private sectors, in public-private collaboration schemes. The objective must be to take advantage of these new value chains so that, during the transition to electric vehicles, we can, on one hand, incorporate higher value-added roles and, on the other, redirect part of current activities toward fields that can absorb that employment.

This vision is reflected in the Auto Plan developed by the sector, led by ANFAC together with Sernauto and the Ministry of Industry, and in which autonomous communities, unions, and all relevant actors have participated. It is a plan in which no one is left out.

“We have the diagnosis and the roadmap; now it’s about putting it into action, each from their own sphere, to move toward 2035 with a stronger sector”

The roadmap is clear: we start from a sector that generates 85,000 million euros of added value, primarily in the traditional business, and, if we do things right and activate that plan over the next ten years, that value could reach 125,000 million. Moreover, employment—which in Spain totals around 1.9 million workers across the sector—could be maintained while simultaneously increasing added value.

To achieve this, it is necessary for all actors to get involved and embrace the plan as their own. We, as manufacturers, certainly do. The plan is this; there will not be another. We have the diagnosis and the roadmap; now it is a matter of putting it into action, each from their respective sphere, to move toward 2035 with a stronger sector.

How have Next Generation funds been spent in the automotive sector?

We need, as is generally the case with regulation, more agility and speed. And this isn’t only about PERTEs: when we talk about Next Generation EU funds in Europe, there seems to be a level of tightening needed, especially regarding CAPEX subsidies. That is where it would likely be helpful to adjust the design of European subsidies. Strengthening that kind of direct investment support could provide a significant boost so that funds arrive more efficiently and have a stronger impact.

In the battery domain, in the so-called specific PERTEs, there are indeed CAPEX subsidies. However, in other areas such as the connected electric vehicle or 5G, subsidies are more oriented toward operating costs or other types of expenditure. And that is where we believe it would be necessary to reorient European programs toward direct investment support. That is probably one of the main differences from what countries like China or the United States are doing.

We are already in PERTE V. From Renault’s perspective, the philosophy is to participate in every available call with concrete projects. It is unlikely that each PERTE aligns exactly with every manufacturer’s processes, because each moves at different paces and with different needs. That is why we opt to apply to all possible programs—whether PERTEs, energy efficiency initiatives, or innovation projects, both nationally and regionally—in order to maximize access to these subsidies.

In any case, it would be desirable to simplify and speed up these processes. It is not easy, but it would be a meaningful advance.
 

Is there concern that Next Generation EU funds will run out? Do you think there should be a replacement with other types of programs that can contribute to the sector?

We are in a situation where there is a mismatch between urgency and structural programs. If we talk about the accelerator, the Automotive Package, competition with China, regulation, or technology, the pattern is the same: there is an immediate urgency and, at the same time, a structural underlying problem. And what we cannot allow is for one to end up absorbing the management of the other.

The automotive sector’s situation is structural today, but we still have urgent problems unresolved. Even at the citizen level: when we talk about the price of the electric vehicle, we have an obvious urgency—to reduce costs—and at the same time a structural problem—our difficulty in competing. It is exactly the same logic.

The PERTE should respond to that structural dimension. However, right now it is heavily conditioned by the urgency to execute the funds and meet milestones. Both administrations and companies work with very concrete calendars: when a project is presented, there are production start dates, deadlines at the end of this decade or the next.

“Once the Next Generation EU funds are exhausted, the automotive sector must remain a strategic bet”

Therefore, that urgency must be managed without losing sight of the structural logic. And, once the Next Generation EU funds are exhausted, the automotive sector must continue to be a strategic bet, both nationally and at the European level. For everything it implies: strategic autonomy, industrial weight, and the sector’s historic role as Europe’s engine of progress for more than a century.

If we want to avoid a large socio-economic problem in terms of GDP, employment, and technological development, subsidies and incentives for the sector—whether called PERTE, Next Generation EU, or implemented with own or European funds—must have a clearly structural character.

How does Spain contribute to the sector at the European level and in comparison with other countries?

Spain is the second European manufacturer, and that is something that is often forgotten. We tend to associate the automotive industry with brands and countries of origin, but the reality is that Spain holds that second position, only behind Germany. Globally, we have also slipped from the eighth to the ninth largest manufacturer, after Brazil’s advance.

That shows we remain a relevant industrial power, but the context is becoming more demanding. Still, we have clear strengths: highly competitive factories, talent, and administrations—local, regional, and national—that understand the sector’s strategic importance and are committed to its development. That is, without a doubt, a competitive advantage.

Moreover, we have a plan, and that is key. We have a diagnosis, a defined roadmap, and it is not obvious that other European countries currently have such a structured approach.

Yet there are also weaknesses. Decision-making centers are not in Spain, but in other European countries like France, Germany, or Italy. And a substantial portion of value added, especially in R&D&I, is generated abroad. In Spain it is developed too, but a significant share remains concentrated in other markets.

Therefore, the challenge is clear: attract more high-value-added activities and consolidate Spain’s role in the new value chain. To achieve this, it is essential to activate that roadmap, maximize existing competitive advantages, continue what has been achieved for decades in combustion, and at the same time drive growth in the electrical realm, where much of the new technology concentrates.

Why do we see more electric car chargers in other countries than in Spain?

Spain has charging points. According to ANFAC’s latest electromobility barometer, published just a week ago, we’re already around 55,000. But the question is: where are they?

I own an electric car and it is possible to travel across Spain with it. Yet I have also driven in Norway, and the experience is not comparable. There, for example, I have done journeys of 700 kilometers without planning the trip. It is the only country in Europe where I have reached a point with just 6% battery left and thought, “Well, in the next twenty minutes I’ll find a charging point.” And indeed, you find it.

“The development of charging infrastructure in Spain cannot be directly compared to that of countries like Norway, the Netherlands, France, or Germany”

Spain is a country very different from the rest of Europe. We cover about 500,000 square kilometers—second only to France in size—with a very particular population distribution, concentrated along the Mediterranean coast and large sparsely populated inland areas. And there is another factor less discussed but clearly perceived by those of us who drive electric cars: the terrain, which differs greatly from central Europe and heavily conditions use and planning.

For all these reasons, the development of charging infrastructure in Spain cannot be directly compared to that of countries like Norway, the Netherlands, France, or Germany. It has its own characteristics. To that is added a problem of visibility: something as simple as improving signage and access to information about charging points would help a lot.

Progress is being made, and today it is possible to travel across Spain in an electric car. But there is still room for improvement in infrastructure, availability, grid capacity, charging speed, and especially in making the entire system visible.

Thank you very much.