Segment leaders such as Tesla Inc (TSLA), Nio Inc (NIO), and Xpeng Inc (XPEV) may have made their mark on the Chinese consumer, but low-priced EVs are enjoying the mass appeal in the East Asian country.
Huge Customer Base
EVs, such as a $10,000 crossover vehicle made by Hozon Auto, are attracting customers due to lower maintenance costs and a smaller price tag, reported Bloomberg.
“These ultracheap EVs are reaching a new customer in China, as they likely will in other markets as prices come down,” said Siyi Mi, a BloombergNEF analyst.
Availability of a wider range has the Chinese consumer spoilt for choice. There is the Hozon Auto Neta N01. Also available is the e1 minicar from Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett-backed BYD Company Ltd (BYDDF) priced at $8,950 and the Hong Guang Mini, a two-door vehicle available for just $4,230. The Hong Guang Mini, built by Wuling — a joint venture between General Motors Company (GM) and the state-owned SAIC Motor — reported sales in excess of those by Tesla’s Model 3 by two-to-one late last month.
Need For Low-Cost EVs Felt Elsewhere
Car prices have outrun wage growth in the United States, which means the lowest-earning fifth of the population needs to spend 30% of their income on transportation costs, according to Bloomberg.
“Taking into account people’s access to transportation, it’s very important to see a greater diversity of models like EVs being offered on the lower end of the price range,” said Selika Talbott, a professorial lecturer and a founding partner of an automotive consultant company, Bloomberg reported. Priced at just under $30,000, the cheapest EV available in the U.S. after subsidies from a major vehicle maker is General Motors Company’s Mini Cooper SE. Some vehicle manufacturers such as ElectraMeccanica Vehicles Corp (SOLO) want to change that by introducing single-person vehicles priced under $20,000.
The Frontrunner On A Backfoot
In February, Tom Zhu, the president of Tesla China, dismissed news that it is working on a $25,000 mass-market vehicle. Previously some media outlets had reported that such a vehicle would have been sold globally.
Xpeng Chairman Brian Gu said last September that the company’s mid-range EVs are already priced around the $25,000 mark.