Viewpoint: Where are the cheap electric cars?
By Jeremy Williams
If I had a pound for every time someone tells me they can’t afford an electric car, I could buy myself a very nice bike. It’s a recurring theme – EVs are all very well, but they’re too expensive for us ordinary folks. I guess I have no choice but to continue driving my diesel SUV.
There are a couple of things to say about this*. First, it’s not strictly true that electric cars are more expensive. The sticker price is often higher if you’re buying outright, but it’s a much more mixed picture when you factor in the total cost of ownership. There are lots of variables, such as where you charge and how efficient the car is, but it’s often cheaper overall.
The second thing is that a diesel or petrol car isn’t as cheap as it looks, because the full costs aren’t paid by the driver. Climate change and air pollution aren’t priced in and we leave others to pay for those.
Nevertheless, I sympathise with the overall point. We struggled to find an electric car we could afford too. There are plenty of adverts for big electric SUVs and luxury cars. Where are the affordable family EVs?
In China, is the answer.
As Nat Bullard of Bloomberg NEF mentions in his annual clean tech presentation, Western car companies have failed us on affordable electrics. Car buyers in China have 122 different cars priced under $30,000 to choose from. North American car buyers have a choice of 6.
Car companies in Europe and North America have prioritised the upper end of the market so they can make more money. As Simms and Murray explain in their recent book Badvertising, there are better margins on bigger cars. Car firms are bringing EVs to the richest first, which is why there is more choice for those looking to spend over $120,000 than there is for the far greater number of people looking for something affordable.
This will be their loss. The world wants cheaper EVs and Western car manufacturers have been slow to respond. People are buying Chinese EVs instead. Among the cheapest in the UK this year are models from MG, BYD and Ora, all of which are Chinese-owned brands. Driven in part by demand for electric cars, in 2022 China overtook Germany to become the world’s second biggest car exporter, and then in 2023 it overtook Japan for the top spot.
There is good news hidden in this industry failure though: China is demonstrating that electric cars are not inherently more expensive. It’s not an expensive technology by nature, it’s just that our car companies haven’t been interested in selling them to us. But whether it’s a new Chinese brand or a legacy car firm that’s scrambling to catch up, cheaper EVs are on the way. If you can’t afford an electric car right now, it might not be long before you can.
First published in The Earthbound Report.