Why Are Micro and Mini EVs Popular Everywhere but the US?

For the first quarter of 2023, the Tesla Model Y was Europe's best-selling vehicle. Not the best-selling electric vehicle (EV) but the best-selling vehicle of any kind. It was also the top-selling vehicle in the U.S. if you disregard pickup truck sales. 

 

General Motors' EVs. Image used courtesy of General Motors 

 

As good as the Model Y may be, not everyone needs a Tesla to meet their electrified transportation needs. In fact, outside of the U.S., where we have an infatuation with gargantuan vehicles, there is a growing market for micro- and mini-sized EVs. 

According to Fortune Business Insights, in 2021, the global market for micro and mini-sized EVs was valued at $8.32 billion, and it is projected to grow to $22.11 billion by 2029. Several factors, including the rising cost of fossil fuels, the increasing awareness of the environmental impact of traditional vehicles, and the growing availability of government incentives for EVs, drive this growth.

 

Small and Affordable

Micro and mini-sized EVs are typically smaller and lighter than traditional cars and have a shorter range. As they are also more affordable, they offer a good option for people in urban areas or with short commutes, as well as those with disabilities who cannot drive traditional cars. They can be used for commuting, errands, and even light delivery. As zero-emission vehicles, they can also enter city centers that restrict gasoline or diesel-powered cars. 

Largely because of their low-cost and minimal parking requirements, micro and mini-sized EVs are rapidly becoming popular in serving transportation needs in many parts of the world. In China, these pint-sized EVs are being used by delivery companies to make last-mile deliveries, reducing traffic congestion and pollution in urban areas. In India, micro and mini-sized EVs are used by families as a second or third car, reducing the number of people traveling by motorcycle, a major cause of accidents in India.

 

Tiny lithium-ion battery-powered EV.  Image used courtesy of Quantum Motors 

 

In Bolivia, Quantum Motors is producing a tiny lithium-ion battery-powered EV with a top speed of 35 mph and a range of about 50 miles. Designed strictly for city use and at $7600, the company has pinned its hopes on boosting e-mobility in South America. The irony is that Bolivia has the world’s largest known lithium reserves, although extracting the valuable material has not yet started there as in Chile and Argentina. 

 

The Miraculous Wuling Hongguang

The SAIC-GM-Wuling (SGMW) joint venture has recently launched a monthly battery payment plan for the blockbuster Wuling Hongguang Mini EV. Selling over 1 million units of the Wuling Hongguang Mini in less than three years, the car has become the world's third largest-selling EV, despite selling only in China. 

 

Small EVs are becoming popular around the world. Image used courtesy of General Motors 

 

Located in Liuzhou, Guangxi, SGMW is a joint venture founded by GM, SAIC, and Guangxi Automobile Group in 2002. SGMW read the tea leaves correctly when it created its Hongguang model in 2019, and the microcar has helped to create a new market for mini-electric vehicles. SGMW has also introduced a new monthly battery payment plan for several models of the Wuling Hongguang Mini, allowing customers to buy the Wuling Hongguang Mini EV starting at $2,838, with a payment of $28 per month for the battery for five years. After that time, the customer will own the battery. Without the battery payment plan, the Hongguang Mini EV prices start at $4,800.

 

The U.S. Perspective

Micro and mini cars in the U.S. have a rocky history. In the 1940s, U.S. carmaker Crosley built a range of tiny sedans, wagons, trucks, and even a sports car but couldn’t find enough interest among U.S. buyers to keep the company afloat. Tiny cars like the British Mini and the Fiat 500 found niche interest, particularly among enthusiasts but were never big sellers. Mercedes-Benz introduced its micro-sized Smart car into the U.S. in 2008 and created a new dealer network to sell the cars. Even an EV version was available in the U.S. before Smart exited the U.S. market in 2019.

The small EVs becoming popular in other parts of the world are often called neighborhood electric vehicles (NEVs) in this country. They fit into a loophole in emissions and safety regulations but are limited to travel on roadways with speed limits no higher than 35 mph. 

Given U.S. buyers’ preference for pickup trucks the size of dump trucks and SUVs the size of school buses, the odds are not high that micro- and mini-EVs will arrive on our shores soon—and that’s too bad. 

The growth of micro and mini-sized EVs is a positive development for the environment and our quality of life. These vehicles offer a more sustainable and affordable way to get around, and their small size can help to reduce parking problems, traffic congestion, and pollution, particularly in the inner city and urban areas. Their small-sized battery packs lessen the impact on critical materials and allow for rapid recharging, even when charging at home, putting much less strain on electrical power grids. They are not useful for long-distance travel, but they can be an efficient transportation solution for daily commuting. With the average price for a new EV in the U.S. heading toward $60,000, they also could be the only way to maintain affordable car purchasing as EVs take over.