Low Range EVs: a feature, not a bug
Some large scale EV trends are well-known.
2020 sales of EVs have been resilient in a time of Covid: whilst the global market for car sales sank 14 %, BEVs rose by over 40% to 2.25 million to reach 3% market share
For those that dismiss such low market shares: consider growth – another 5 years at 40% growth makes BEVs 17% of the sales market: another 5 equals 85% by 2030 – and the century-long era of combustion dominance is over.
There are also wider trends – such as the move by VW to try and dominate this high-growth market currently dominated by Tesla.
Perhaps the bigger trend is one that is still under-reported: the rise of Chinese manufacturers – by market capitalisation two of the world’s largest five car manufacturers are Chinese.
In a way this is obvious: China has limited local oil and gas resource, so if it had a long-term fleet of ICE cars it would forever be dependent on imported energy, and have to constantly manage urban pollution issues
Along come mass-produced battery EVs: which plays to China’s great strengths – manufacturing prowess, access to global metal supply chains and a giant home-market to sell products.
Suddenly – Chinese car manufacturers such as BYD, SAIC, Nio and Geely are international names, sometimes via purchasing local brands such as the UK’s MG, and sometimes via home-grown partnerships with for example Tesla (manufacturing and battery production), or with the sleeping giant of the US, GM.
Which brings us to the second-best selling EV in the world in 2020, which reinforces this trend, and points to two others – behold the Wuling Hongguang Mini EV.
In 2020, even though only released late in the year, it sold 120,000 units, or 5% market share from nowhere – only bested by the iconic Tesla 3, and ahead of the Renault Zoe, Nissan Leaf and VW ID.3.
How come? it’s most obvious selling point is that it costs about £5,000.
Critics will point to its small size, limited range, limited speeds and so on: but this is missing the fact that these are features, not bugs of the Mini EV
It is designed precisely to have these limits, because its customers have these limits too: Chinese (and European) urban families do not travel more than about 10 -20 mile per day and so an overnight charge of the 13kWh battery will last a week. A top speed of 65 mph is also suited to a car that does a majority of urban trips.
Being small, safety and longer-trip issues will remain, but these along with likely higher speeds and range are already being developed as battery tech improves quickly.
And already even in the US, equivalent models such as the Kandi America are taking off.
So here are the two other mega-trends in the EV market:
First – Wuling Hongguang may not be a household name: but its JV partners of GM and SAIC certainly are – and it marks the re-emergence of the large OEMs, such as VW and GM into the EV arena.
Second, it also shows how the increasing cheapness of battery prices – now close the magic figure of $100/kWh which means parity with ICE cars - allows two fronts of vehicle development to suddenly emerge: increasing range of premium batteries, or lower range with increasingly cheap batteries.
The learning curve / economy of sales of batteries allows cars to now fit a wide array of market niches – this was unavailable to ICE cars as combustion engines have hard thermodynamic limits to cost reduction (think the Smart Car);
But now as cars become devices with more in common with other tech platforms such as LCD TVs and lap tops, rather than gas boilers, manufacturing giants such as Chinese firms will start to dominate design, production and market targeting
Expect EV costs to continue to decrease, performance to improve , and more precise marketing to develop - very quickly.
Low range EVs are a feature, not a bug. Having spotted a gap - manufacturers such as Wuling Hongguang are stepping up to create a whole new EV market.