The French manufacturer faces a shock of several billion euros in 2025, the fault of a costly divorce with Nissan which weighs down a balance sheet otherwise driven by electric.
new boss François Provost must, however, deal with the profitability of electric cars that is much lower than that of gasoline models, weighing on an operating margin which is slowly crumbling. To redress the situation, the group is banking on a reduction in the manufacturing costs of each vehicle and on the total takeover of Flexis, its innovative electric van project.
The balance of any account of a broken union
We knew that the honeymoon between Boulogne-Billancourt and Yokohama was already a thing of the past, but the time to checkout has come. Renault
posts a net loss of 10.9 billion euros for the 2025 financial year. It is not the daily activity of the French manufacturer that is in trouble, but rather the accounting review dictated by the end of the historic alliance established in 1999. This marriage, once praised as a model of integration, never really survived the arrest of Carlos Ghosn in Japan at the end of 2018. Since this earthquake, the two partners have continued to move away, and Renault ended up adjusting the value of its 35% in Nissan according to the stock market price. This is called the end of equity accountingand this is paid at a high price in the balance sheet columns.
It must be said that Nissan does not make the task of its former ally easy. The Japanese manufacturer itself expects a severe operating loss for the coming year. Last July, Renault thought it would come away with a slate of 9.5 billion, but the slippage in the Japanese’s results further increased the final score. By devaluing this participation, Renault finally demonstrates its independence after years of tensions which slowed down its projects.. This change comes at a time when the organization itself has undergone a major upheaval. Since last summer, François Provost has been in charge. Appointed general manager on July 30, he succeeded Luca de Meo, who left for the world of luxury at Kering. Provost inherits a company that sells more cars, whose turnover increased by 3% to reach 57.9 billion euros,
but whose real profits evaporate. The new boss will have to find the means to ensure that this growth in sales finally translates into new money, especially since the operating margin has fallen to 6.3%, compared to 7.6% a year earlier.
Reconnect with comfortable margins
The real concern is the profitability of electric. Battery models appeal to customers (they now represent one in five sales for the Renault brand),
but they don’t bring in as much as the good old heat engines. Unfortunately, the outlook is not exactly rosy for the year 2026. Renault expects a further drop in its operating marginwhich should stagnate around 5.5%. Despite everything, management wants to stay the course. It targets a margin of 5 to 7% in the medium term. To achieve this, the brand has already managed to reduce its costs by 400 euros per vehicle produced. It’s a saving that seems small in isolation, but multiplied by hundreds of thousands of cars, it’s an essential breath of fresh air. This hunt for waste must continue, it is a sine qua non condition for not being left behind by new arrivals who are slashing prices.
In this grayness, there is a project that seems to bring a smile to the faces of managers: Flexis. Renault is currently in very serious discussions with its partners, Volvo and CMA CGM, to buy out the entirety of this electric van company born in 2024. Renault already holds 45%, but wants to regain control completely. For what ? Because the utility vehicle market is often much more profitable than that of the private car. Companies need clean vehicles for their city center deliveries, and they are ready to invest in efficient work tools. Taking control of Flexis means securing a place of choice in a segment where competition is perhaps less fierce and margins more comfortable. While waiting for these projects to bear fruit, Renault is trying to reassure its faithful. The dividend will remain stable at 2.20 euros per share. The year 2026 will be that of the test for François Provost. He will have to prove that Renault can move forward alone, and above all that the challenge of electrification is not a bottomless financial pit. The path is narrow, strewn with pitfalls, but the diamond brand seems determined to fight on all fronts.
