Features
21 oct 20

Adoption challenge: Low Speed EVs for China

How conservative is the Western company car driver? We seem to have a pretty rigid idea of what a company car needs to look like; North Americans like their F150s, Europeans will preferably go for a premium brand sedan or compact SUV. We’re slowly getting used to the idea that our car could be a plug-in hybrid – great for taxes! – but going full electric is still a bridge too far for many of us.

China

The uptake of electrification in China is much higher than it is in the West for a variety of reasons: manufacturers have been incentivized to produce EVs since the framework of “Made in China 2025” was put in place, obtaining a license plate for an EV is easier and cheaper than the bidding/lottery system that’s in place for ICE cars and, finally, there are still some pretty significant subsidies for efficient EVs.

At the end of the day, it’s pretty similar to the incentivizing schemes in Europe, except for one thing: the European company car driver is brand-loyal and prefers a premium experience. Convincing a company car driver to “downgrade” from a 3-Series into an ID.3 or Leaf is a challenge…

Importance of the Form Factor

Another reason why the uptake of EVs in China is much higher than anywhere else in the world, is the Chinese OEMs’ creativity when it comes to the form factor; unlike the global car manufacturers, the Chinese (and Indian for that matter) offer a large range of small vehicles (mini-EVs) and even electric 3-wheelers. This makes sense in a highly urbanized and traffic-dense environment such as Shanghai and Beijing: inner-city traffic doesn’t require a vehicle the size of an S-Class, right?

Rational versus emotional

Small form factor vehicles have been part of the Chinese (and Indian) automotive landscape for decades, simply because they were affordable. The Chinese consumers are indeed a bit more pragmatic than the Western and have a habit of looking for the most convenient solution for each type of transportation need. They are also keener to adopt alternative (mobility) solutions, such as public transport, hailing or sharing. In other words, the Chinese consumer is de facto an on-demand mobility consumer and the small vehicle is part of the suite of solutions.

Low Speed

Finally, when Europeans do small form factor (see Smart), we insist that the vehicle can do highway traffic (fast) as well as urban traffic (slow). The Chinese have avoided these hybrid models and have commercialized low speed EV (LSEV) only in the small form factor, focusing again on short-distance and urban traffic. It confirms the positioning of the LSEV as a city vehicle.

And this might be the sweet spot for a Western audience: maybe the LSEV is not an alternative to a car, but rather an alternative to a bicycle or motorcycle?

Image Credit: Shutterstock

Authored by: Yves Helven