An unexpected star is disrupting China’s electric vehicle market

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Hello readers,

When was the last time you took a risk?

For me, it was leaving my cushy corporate job – a decision for which I’ve no regrets. It’s only in adversity that we find clarity, and I realized I’d be better off channelling my energy into work that I actually cared about.

While the pandemic has worn us thin, it’s also brought new opportunities to light. In China, an unexpected star has risen: the US$4,200 micro electric vehicle. With price sensitivity a growing concern for consumers amid Covid-19, the car’s timely arrival has set the stage for change in the nation’s new electric vehicle market (NEV).

Today, we look at:

• How micro EVs could soon supplant China’s fleet of low-speed electric vehicles
• A newly backed Indian startup that’s helping small merchants go digital
• Other newsy highlights such as former Chinese tech unicorn Renrenche’s early talks to sell for US$1,290, and Jio and Qualcomm’s 5G plans for India

PREMIUM SUMMARY

China’s US$4,200 car is shaking up China’s NEV market

China’s NEV market had flourished up until the government’s decision last year to phase out subsidies for NEVs by 2022. But the Hongguang Mini EV – a joint venture between the SAIC-affiliated Wuling Motors and US carmaker General Motors – is giving the market a much needed boost. The boxy car wins neither in looks nor range and has no safety features like airbags. So how has this humble contender in China’s electro-mobility scene come up on top?

• The new people’s car: According to Wuling Motors, around 40% of its customers are between 20 and 30 years old. The Chinese automaker, which also manufactures micro vans and micro pickups, aims to make its micro EV affordable for everyone – as opposed to being a Tesla rival. The Hongguang Mini EV retails for US$4,200, or one-tenth of what Tesla’s Model 3 costs.
• Small margins, big quantities: Wuling Motors designs its vehicles based on a target retail price, which is further reduced by scaling up its production. Clearly, it’s a winning strategy: For the month of August, sales figures for the Hongguang Mini EV came in at second place on a top 10 list of the best-selling EV models within China.
• The end days for LSEVs?: China’s micro EVs are unlikely to disrupt the luxury EV market. Instead, industry experts reckon that these vehicles could eventually supplant the country’s fleet of low-speed electric vehicles (LSEVs), which sell an average of one million units a year in China alone. And if micro EV makers do expand into overseas markets, they’ll first need to meet the safety standards of these countries, such as installing airbags in vehicles.

Read more: The new people’s car in China: Micro EVs

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