BEIJING (Reuters) – When 32-year-old photographer Jaco Xu needed a car to work in the eastern city of Hangzhou, the price of GM’s latest micro EV GM.N The Chinese joint venture has overcome its qualms about electric vehicles.
Xu paid 38,800 yuan ($ 5,735) for his small two-door Wuling Hong Guang MINI electric vehicle, while the base model sells for only 28,800 yuan ($ 4,200), making it the most electric vehicle. cheaper from china.
“It feels good. The price is so low and the appearance is simple and beautiful, ”said Xu. “Why would I hesitate at this price?”
Launched in July, the MINI Wuling is heading into a new electric vehicle segment in China following changes in government subsidies – smaller vehicles with less range of charges, but a very low price.
Despite the basic features – no air bags, optional air conditioning, and a range of less than 200 km (125 miles) due to a smaller battery – buyers were enthusiastic.
SGMW, GM’s company with partners SAIC Motor Corp 600104.SS and Guangxi Automobile Group, sold around 15,000 vehicles in August, making it the top-selling electric vehicle in China for the month, overtaking Tesla’s. TSLA.O Popular model 3.
The company plans to expand the manufacturing capabilities of the new model, manufacturing cars at its factory in Liuzhou as well as at its existing facilities in Qingdao, said Zhou Xing, director of branding and marketing at SGMW.
“We have positioned this model as a ‘tool for moving people’,” he said ahead of the Beijing motor show which begins on Saturday. “Customers can drive their cars to work every day.”
The target market includes people like Xu who are looking for a car in town as a second car, rural buyers who want a vehicle to transport goods, and young first-time buyers motivated by price.
Total sales of new energy vehicles – including electric, plug-in hybrid and hydrogen fuel cell vehicles – are expected to reach 1.1 million vehicles in China this year, or about 5% of total auto sales.
The micro-car represents a shift in what characterizes a mainstream electric vehicle, as policymakers push for increased production of electric vehicles and sales have been bolstered by restrictions on gasoline-powered cars.
In response to government demands for generous subsidies for electric vehicles, automakers over the past decade have developed higher energy density battery systems to allow cars to run longer on just one. charge.
Tesla’s Model 3, which has a range of over 400 km, has been the Chinese market leader for most of 2020, selling for around $ 43,000, around 10 times the cost of the MINI Wuling.
However, China sharply cut subsidies in 2019 and is now asking for higher energy efficiency from EVs to save energy. Automakers, meanwhile, are planning smaller electric vehicles with moderate range, aimed at customers who can easily charge the cars, industry executives said.
The economy is meager. Wuling MINI will not get EV subsidies due to its short range. For SGMW, the cheap price means it makes very little money at best, according to insiders familiar with the matter.
However, electric vehicles generate green credits for SGMW which can be used to offset negative credits from other companies like SGM, its subsidiary which is expanding a line of larger SUVs under the Buick, Chevrolet and Cadillac brands.
“Selling micro-EVs in China makes more sense this year,” said a product planning manager at rival GM.
“Subsidies have become less of a pricing factor because the government has already cut a lot, while green credits are expected to become more expensive,” the official said.
Wishing to reverse a decline in sales due to a slower economy and fierce competition, GM expects EVs to account for more than 40% of its new launches in China over the next five years.
The Detroit automaker is reorganizing factories in Shanghai, Wuhan and Liuzhou under its two Chinese JVs to allow gasoline-powered car production lines to produce electric vehicles, according to public documents detailing its construction plans.
So far, the Wuling MINI is the cheapest EV, but it faces competition from the cheaper models of its BYD rivals. 002594.SZ et BAIC BluePark 600733.SS.
Great Wall Engine 601633.SS and Toyota 7203.T Chinese partner GAC 601238.SS also expect more electric models with a range of less than 400 km, company officials said this month.
And startup Kaiyun Motors is trying to drastically lower the price of its new Pixel electric pickup truck to around 20,000 yuan for city delivery services, though these electric vehicles are sold without batteries, allowing consumers to trade them in.
“China is a huge market, any product with a clear positioning can attract enough customers to survive,” said Kaiyun founder Wang Chao.