Renault's Crossroads: Leadership Transition and the Path to Automotive Leadership

The automotive industry is at a pivotal moment, with electrification, sustainability, and technological innovation reshaping the competitive landscape. Renault Group, a stalwart of European automotive manufacturing, now faces its own critical juncture: the departure of CEO Luca de Meo on July 15, 2025. As investors assess the risks and opportunities of this leadership transition, the question looms large: Can Renault maintain its strategic momentum under new leadership, or will succession risk derail its progress?

The Leadership Transition: Risks and Context

De Meo's tenure has been marked by a dramatic turnaround. Over five years, he stabilized Renault's finances, revitalized its product lineup, and positioned the company as a key player in the EV market through initiatives like the Ampere brand. His decision to exit for a potential role outside the automotive sector—possibly at Kering, a luxury goods conglomerate—leaves Renault's future in uncertain hands.

Succession risk is a critical concern for investors. A sudden leadership change can disrupt strategic priorities, delay execution, or alienate stakeholders. For Renault, the stakes are heightened by its ambitious targets: achieving carbon neutrality in Europe by 2040, expanding EV sales, and maintaining competitiveness against Chinese automakers. The Board's reliance on a “predefined succession plan” offers reassurance, but the lack of a named successor as of June 2025 introduces uncertainty.

Strategic Continuity: The Case for Confidence

Despite the risks, several factors suggest Renault's transformation is resilient to leadership changes.

1. Institutionalized Strategy: De Meo's “Renaulution” plan—focused on cost discipline, electrification, and brand differentiation—is deeply embedded. Renault's EV unit, Ampere, now led by Josep Maria Recasens, has clear milestones: launching the Twingo EV in 2026, a C-segment EV lineup by 2028, and a 40% cost-reduction target. These projects are unlikely to falter under a new CEO, as they are tied to broader industry trends and regulatory mandates.

2. Strong Management Bench: The Board has emphasized confidence in the existing team. Executives like Recasens (Ampere CEO) and Philippe Krief (now overseeing Alpine) have proven track records. Krief's promotion to lead Alpine's electric expansion—targeting a 7-model lineup by 2030—demonstrates internal talent development aligned with Renault's long-term goals.

3. Market Positioning: Renault's brands span affordability (Dacia) to luxury (Alpine), offering flexibility in a fragmented market. Its 2024 sales of 2.265 million vehicles and 98,000 employees provide scale and operational depth. Moreover, its partnership with Nissan and Mitsubishi in the Alliance remains a stabilizing factor, though not without its challenges.

Data-Driven Analysis: Performance and Valuation

To gauge investor sentiment, consider Renault's stock performance relative to peers.

Renault's stock has lagged behind Tesla's meteoric rise, reflecting broader concerns about European automakers' competitiveness in the EV race. However, a closer look at valuation metrics reveals opportunities.

While Tesla's growth remains unmatched, Renault's EV sales have grown at a 22% CAGR since 2020—a significant achievement for a traditional automaker. This suggests underlying execution strength that could outlast individual leadership.

Investment Considerations: To Buy or Hold?

Bull Case: A smooth transition to a CEO who accelerates Ampere's growth, improves Alpine's motorsport performance, and deepens cost discipline could propel Renault's valuation. If the new leader aligns with the Board's stated priorities—electrification, carbon neutrality, and global expansion—Renault could reclaim its position as a European EV leader.

Bear Case: A misstep in leadership selection could delay critical projects, such as the Twingo EV launch or partnerships with tech firms for autonomous driving. Regulatory headwinds, including stricter emissions targets, could also strain margins if cost cuts falter.

Valuation Check: Renault's price-to-sales (P/S) ratio of 0.4x is well below Tesla's 4.5x, reflecting skepticism about its EV potential. However, its low valuation could offer a margin of safety if its strategies bear fruit.

Conclusion: A Strategic Buy for the Long Term

Renault's leadership transition presents risks, but its institutionalized strategy and strong management team suggest continuity. Investors should view the July 2025 change as a test of Renault's ability to self-sustain its transformation. While short-term volatility is possible, the stock's low valuation and the broader EV market's growth trajectory make it a compelling long-term play.

Recommendation: Investors with a 3–5 year horizon may consider accumulating shares at current levels, particularly if the new CEO's vision aligns with Ampere's roadmap. However, close monitoring of post-transition execution—evidenced by EV sales growth and cost targets—is essential to confirm the bull case.

As Renault enters its next chapter, the question remains: Can it drive innovation without its “captain of industry”? The answer may determine whether this storied automaker becomes a leader in the sustainable mobility revolution—or another footnote in automotive history.