Tesla Price Cuts Make Renault CEO Nervous: 'A Warning We're Looking At'

Price cuts that were recently undertaken by Tesla Inc TSLA are a "warning" to competing companies in the electric vehicle space, said Fabrice Cambolive, the CEO of Renault.

What Happened: Cambolive said Tesla's price cuts would lead the group to closely inspect its own global pricing policy, reported Reuters.

"We will analyze country by country, market by market, which level of competitiveness we need to have to stay in the match," said Cambolive.

Renault's electric Megane now costs nearly as much as Tesla's Model 3. The Tesla sedan costs EUR 41,990 ($ 45,966 ) in France after Tesla cut prices, while the Megane electric costs EUR 42,000 ($45,977).

"It’s clear that Tesla cutting prices is a challenge, starting with the cost side of things. It’s a warning that we are looking at," said the Renault top executive.

Why It Matters: Cambolive said the sales of electric Megane rose sharply in March with strong orders despite a very limited discounting policy, reported Reuters.

Global sales for Renault touched 354,545 vehicles in the first quarter of the year, according to the report. 

Renault reportedly has plans to spin off its EV unit and list it on the market this year.

In April, Tesla cut $1,000 in prices for its two Model 3 variants. At the time it was reported that these price cuts could translate into headaches for both the company's traditional and EV rivals.

Earlier in January, Tesla CEO Elon Musk said that price cuts had triggered a wave of demand and sales could hit 2 million in 2023 if there was no external disruption. 

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