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Is the Next Showdown Brewing Over Budget Micro Electric Cars?

published: 2023-06-06 9:30

The rapid strides made in the EV sector are unmissable. Although there is a range of high-priced, luxury models packed with advanced technology and superior performance, many consumers eagerly await the advent of more economical, everyman EVs. Yet, before those make their debut, several automakers are vying for dominance in the more affordable micro EV market.

In 2020, the Hongguang Mini EV by SAIC-GM-Wuling radically transformed the Chinese EV market. Its relatively simple specifications and a price point of just over CNY 30,000 (USD 4,275) resonated with urban residents. Coupled with favorable policies, the Mini EV soared to become China's best-selling EV, holding the top sales position among Chinese EV brands for 28 consecutive months through 2022. With cumulative sales of 1.11 million vehicles—554,000 sold in 2022 alone—it has cemented its status as China’s EV superstar.

The Mini EV has quickly become a common target for Chinese automakers, with Geely’s Panda Mini EV and Changan’s Lumin jumping into the fray, eager to seize a piece of this burgeoning sector. The newly-launched BYD Seagull, which went on sale in April, sold out its first 10,000 units in a day. The fervor for micro EVs isn’t just a Chinese phenomenon—it’s catching on globally.

The Geely Panda Mini EV is priced around CNY 50,000 (Source: Geely)

In 2022, French automotive heavyweight Citroën rolled out a limited edition of its micro EV, the Ami Buggy. The batch of fifty vehicles was swept up by buyers in less than 20 minutes, injecting a dose of confidence in the automaker. Capitalizing on this success, Citroën introduced the My Ami Tonic. Priced at a competitive 8,990 euros, this nimbler performer boasts 8 horsepower and a 70 km range, positioning it as the perfect solution for daily commutes and short-distance deliveries.

Micro EVs has soared in popularity across Europe due largely to their affordability and practicality. With a capped speed of 45 km/h, these vehicles are accessible to anyone aged 14 and up, bypassing the need for a driver’s license. The increasing implementation of low emission and zero-emission zones in Europe’s major cities further bolsters their appeal. These compact, eco-friendly vehicles provide a sensible option for navigating city centers while providing shelter from the elements.

Sharing resources with the Citroën Ami is the Opel Rocks-e, essentially the German version of the Ami. Similarly, in Japan, Toyota has introduced the C+ Pod, another contender in the mini EV segment. Automakers consider these micro EVs to be safer and more suitable for the everyday needs of the elderly population compared to previous electric assistive devices. They also serve as ideal options for short-distance transport and shared mobility within big cities.

While these micro EVs might struggle to carve a niche in markets like the US and Taiwan, it’s clear that in regions such as Europe, China, India, Southeast Asia, and South America, these short-range, low-cost vehicles could play a key role in carbon reduction. They may well become the new battlefield for major automakers looking to stake a claim in the eco-friendly automotive market.

The electric vehicle start-up, WinkMotors, offers a variety of micro EV options (Source: WinkMotor)

However, despite their market potential, micro EVs are not without challenges. Firstly, the technical threshold for these vehicles is virtually nonexistent, and thus rely on low-cost competition, leading to extremely low profit margins. The higher the production volume, the greater the burden on the manufacturers. Secondly, as automakers begin to overcome chip and battery supply chain issues, price reductions led by Tesla are narrowing the cost advantage of micro EVs by lowering the prices of mid-range EVs.

Secondly, the world of self-driving technology remains out of reach for micro EVs. The cost of equipping them with the full array of sensors, computing elements, and connectivity features overshadows the cost of the vehicle itself. Consequently, a city teeming with these pint-sized EVs would complicate the transition to fully autonomous driving. As driverless taxi services gain traction, we can expect the appetite for micro EVs to wane.

Predicting the future, however, is always a challenge. If Elon Musk’s projections had come to fruition, Tesla would have achieved full self-driving capabilities three years ago. But that dream remains elusive. In the meantime, these affordable micro EVs—perfect for brief city commutes— will continue to fly off the shelves globally, marking them as a fiercely competitive domain for automakers.

(Image Source: Citroën)

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