(Bloomberg) -- Bigger isn’t necessarily better in the auto industry, Renault SA Chief Executive Officer Luca de Meo said, putting the carmaker at odds with his archrival Stellantis NV on the subject of industry consolidation.

While consolidation makes sense in mature markets, staying agile is important as new technology evolves and electric-vehicle demand remains volatile, the CEO told Bloomberg Television.

“We are making much more money selling much less cars,” de Meo said Thursday. “It doesn’t mean that being bigger makes you stronger.” 

The complexities of the shift away from the combustion engine have sparked talks of industry consolidation, with Stellantis CEO Carlos Tavares predicting the rush to offer more affordable EVs will end in a “bloodbath.” Volkswagen AG — one of the largest manufacturers globally — has struggled shifting to battery technology. Companies also have to deal with cooling EV demand and pressures sparked by Tesla Inc.’s frequent price cuts. 

De Meo is overhauling Renault, including pulling back from its decades-long alliance with Nissan Motor Co. and separating its EV assets from the legacy combustion-engine business. The CEO cited the plan to form a combustion-engine joint venture with China’s Zhejiang Geely Holding Group Co. as an example of consolidation that makes sense.

While this year may be “tricky” for EVs, sales are expected to recover in 2025 as automakers must meet tightening emissions targets in Europe, de Meo said. Renault late Wednesday forecast resilient returns for this year and proposed its highest dividend since 2019. 

Read More: Renault Sees Solid Margin as Electric-Car Demand Slows

Meanwhile, de Meo remains open to broader industry cooperation to shoulder the expenses of the EV shift. Renault’s competitors are showing interest in the French carmaker’s plan to develop profitable EVs costing less than €20,000 ($21,466), the CEO said.

Renault is discussing such a joint EV platform with peers “left and right,” de Meo said.

“We’re very open to share that kind of investment because it’s very difficult to make money with small cars, and we’re trying to find a way.”

--With assistance from Francine Lacqua.

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