Micro EVs a New Trend In Chinese Car Buying
In recent years, more and more manufacturers in the US are focusing on making large SUV and trucks. However, China is going in a somewhat different direction. China is pushing electric vehicles (EVs) like no other country has ever done before – it is part of the Chinese government’s clean air initiative to control air pollution.
That aside, population is also an interesting challenge for the Chinese government to tackle. A negative side effect of the one-child policy is that China is now facing an aging society. To combat this, the government has implemented a new policy allowing families to have two children instead of one. Because of this, most car manufacturers are predicting that China is going at the direction that the US has taken. Larger family equals larger vehicles.
But not quite, most young families will have a slightly larger vehicle, yes. But at the same time, grandparents and young, single people are increasingly interested in micro EVs.
With increasing urbanization in China, most people live in a large city environment, so parking and traffic can be a total nightmare. That pushes these two consumer groups to consider micro EVs, which are cheap, affordable and easy to park. Right now, the micro EV market is dominated by Chinese car brands, with the Hong Guang MINI EV being the bestselling micro EV from January till September this year, one month even selling 14,495 units. It seats four, has around 170 KM (106 miles) range, comes with back up camera, and the best part is it only costs around $4,000 USD.
Silver-haired Consumers
According to the Beijing Daily, China has changed its laws regarding the maximum age that a person can hold a driver’s license from 70 years old to no age limit. This will further boost China’s automotive sales. People like my grandparents always dreamed of owning a car, however with age limit they were unable to do so.
Most Chinese grandparents are a lot more involved in their grandchildren’s daily lives than here in the US. For example, grandparents typically pick up the grandchildren from school every day so the young parents can focus on work.
Micro EVs serve this purpose quite well. They typically have more than enough range and seating capacity. They are a lot easier to maneuver in the busy city streets and most of them are made of plastic outer skin making them quite resistant to damage.
Incentives and Low Maintenance Make Micro EVs Attractive to Young People
China is using incentives and policies to encourage people to buy EVs, typically to win the Chinese car buying lottery for EVs is a lot easier than a typical internal combustion engine car. That is another reason why younger single people are turning towards micro EVs.
But young people also car about their image, so some Chinese car manufacturers saw this trend and began develop micro EVs to be more attractive. The new design philosophy has turned cheap and boring looking EVs into something trendy and cool. The Brand BaoJun is at the forefront, with its E200 (first image) looking like it could be coming out of the Ironman movie, and with its red and gold paint scheme, its especially popular among young first-time car buyers. Compare to a conventional internal combustion engine car that needs to be maintained regularly, EVs require very little maintenance, which is also very attractive to busy, young people. It completely eliminates the need of warming up the engine in the winter and cooling down the turbo in the summer, no more messy oil changes every 5000 miles, and brake pads last a long time because of the regenerative breaking. All of this reduces the stress of owning a vehicle in a city environment.
What About Western Manufacturers?
This new trend did not start in China, in fact the Smart Fortwo EV and Fiat 500e can be seen everywhere in the winding European streets. But Western car brands do not appear to be competitive selling Western models in China – likely because of price and regulation. For a Western brand to be able to compete in this segment it needs to lower its cost dramatically and also custom design a product that fits this market instead of bringing models from overseas and try to make it work. That means domestically operated factories and locally sourced materials needs to be used. For example, the Baojun is created by SAIC-GM-Wuling Automobile, General Motors’ light-vehicle partnership with the Chinese SAIC Motor Corp.
The Future of Micro EVs
While Chinese families are increasing the demand for SUVs, China has a massive population with diverse needs, and it is important to keep in mind that not all consumers feel that bigger is better. As China becomes increasingly urbanized, experts are predicting the micro EV segment will continue to grow exponentially.
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