In unusual car news, Reuters reports that Nissan has closed order books on the Sakura, citing unprecedented demand. If you haven’t heard of the Sakura, don’t worry, it’s a delightful little electric kei car that we don’t get in North America. Packing a tiny little 20 kWh battery pack and a range of just 112 miles on the WLTC cycle, it carries a base price of ¥2,399,100, or around $16,310 in American dollars.
With styling this cute, pricing this low, and the low running costs of an EV, it shouldn’t be surprising at all that the Sakura is a smash hit. Sales started in May and by July, Nissan reportedly received more than 23,000 Sakura orders. That’s greater than the total number of EVs sold in Japan last year. Let that sink in for a second. Nissan has effectively dominated a segment in its home market by making a small EV that people can actually afford to buy, which is really the key to mass EV adoption across the globe. Yes, even in America.
A recent Pew Research Center study found that younger people are significantly more likely to consider buying an EV than their older cohorts. A full 55 percent of those between the ages of 18 and 29 who were surveyed would either strongly or somewhat consider an EV for their next car, compared with 34 percent of those between the ages of 50 and 64, and 31 percent of those aged 65 or above.
While that’s great for EV sentiment, the trouble is that young people are the least economically-mobile age group. The Bureau of Labor Statistics reports that in the third quarter of 2022, workers between the ages of 20 and 24 saw median weekly earnings of $706, and workers between the ages of 25 and 34 saw median weekly earnings of $1,003. In contrast, workers between the ages of 45 and 54 saw median weekly earnings of $1,224, while workers between the ages of 55 and 64 saw weekly median earnings of $1,172.
What’s more, according to the Fed, younger families have significantly lower median net worth compared to older families. In 2019, families where the head of the family was under 35 years old had a median net worth of $13,900, compared to a median net worth of $212,500 for families where the head of the family is between the ages of 55 and 64, and a media net worth of $266,400 for families where the head is between the ages of 65 and 74.
Now, let’s compare that against the cost of electric cars. According to Kelley Blue Book, the average transaction price of a new electric car in July was $66,645, compared to the average hybrid car at $32,365, the average compact car at $26,285, and the average new vehicle overall at $48,182. It’s not an earth-shattering revelation that people with low net worths and comparatively lower income often can’t afford expensive cars. If we want EVs to be successful with the demographic that wants them the most, they need to be cheap.
A more local example of this is the Chevrolet Bolt. Earlier this year, Chevrolet dropped Bolt prices dramatically, to the point where a 2023 Bolt 1LT starts at $26,595 including freight. The result has been predictable, with 14,709 Bolt EVs and Bolt EUVs sold in America during the third quarter of 2022. That’s more than any single non-Tesla EV, an impressive feat considering how the Bolt’s architecture dates back to 2016.
Another great example is the Wuling Hongguang Mini EV, packing just 27 horsepower in base trim and a price tag of less than $5,000. Top speed clocks in just north of 60 mph and there isn’t much in the way of safety kit, but that low price tag does get you a choice of funky colors and seating for four. Despite its low top speed and diminutive size, the Mini EV quickly became a hot commodity, breaking the million sales mark earlier this year.
I get it, making cars is hard and making cheap cars is doubly hard. With volatile material prices and razor-thin profit margins, it’s dicey getting into the affordable EV game as its one that’s won on volume rather than margins. It’s also a game that absolutely needs to be played to put people in the battery-powered cars that they want. Every young person who buys an EV will more than likely buy another EV as an eventual replacement, so it’s a great opportunity for car brands to pick up a new generation of customers as current customers won’t be around forever. The playing field’s being reset, who will take advantage of it?
[Editor’s Note: As far as I’m concerned, EVs like this represent the quickest way we can get the most people into EVs. Right now, we’re promoting 100 kWh electric vehicles that cost too much, are too dirty to build, weigh too much, and require too much energy to move down the road. A small EV uses less energy when driving a given drive cycle due to decreased drag and rolling resistance. As such, a small EV can do more with a little battery than a bigger EV could. A smaller battery is cleaner to manufacture, and it means more EVs can be built, which is especially important at a time when resources are limited. Why we all need to pay thousands of dollars extra and drag around 1,000 pounds of dirty battery everyday just because we travel to our inlaws every few months is beyond me. I want a world filled with interesting, nicely-styled $9,000 EVs (after federal incentive) that go 65 mph and drive 100 miles. I’d use that everyday, and many Americans would, too, I bet. Anyway, allow me to step off this soapbox -DT]
Lead photo credit: Nissan
I am in the 50+ age group and I so really really want a super cheap EV car. My jeep is just a hobby car as I work from home and my wife has her minivan with the crazy expensive dog kennel and stuff for dog competitions. If we had an EV she could drive to work we would just use our ICE hobby cars on the weekend BUT we do not want to spend 40K on a 3rd car but we would spend <$20 and we just do not want a used and abused Leaf.
Hot take: we just need more sub $20K cars in this country which seems to have been abandoned by every manufacturer with the exception of Nissan and Mitsubishi.
Well of course we don’t have these in North America, the steering wheel is on the wrong side.
This car might seem “cheap” compared to an average new car in the US. However this is remarkably little car for $16,000 US dollars.
And in fact, a cursory googling shows average new Kei cars prices are around $10,000. So much like in other segments, the EV seems to be commanding a 60% price premium.
Materials costs being what they are, a few thousand dollars added to the production cost could turn this into a LOT more car for the money. Manufacturers engage in what is called price discrimination, and their products reflect that philosophy. There’s a sweet spot that you could build to and sell at for a very low cost, but it would cannibalize the sale of a number of higher-margin vehicles.
EVs are so simple, that there is potential for them to be less expensive than gasoline powered ICEs given current tech. The designer of the Renault ESpace said this was the case nearly 20 years ago, in fact.
And yes, Federal incentives for these cars is totally stupid, IMO. So too is subsidies for fossil fuels. The automakers are going to add that Federal incentive to the cost of the car.
(after federal incentive) is the problem, if these things are not on there own incentive enough to buy, why am I forced to subsidize the movement? Voting in America is tomorrow, let’s hope we start the road to voting people with this agenda out.
I am not against an EV, even cheap and unsafe ones. we have a choice in America and it should not be coerced by a political party agenda.
If you think the oil and gas industry isn’t also massively federally subsidized, you’ve got your head buried deeper in the sand than a Pennsylvania sludge pumper
Two wrongs continue to not make a right.
I drove a Mitsubishi i-miev back in 2010 or so. It was fine as a city car and I think would have been popular if it cost half as much.
I worked for a dealership which had Mitsubishi under it roof during that time. Those iMIEV were enclosed golf carts. I can’t even remember anyone buying one. The couple we had on the lot got used to transport employees to the various dealers and the detail center up and down the avenue.
It’s not just about being cheap to buy; surely many younger folk don’t buy into that stuff about having the biggest, fastest pose machine, they just want a car that will get them to work and the shops, be easy to park and fit a few friends when needed.
Dont forget about the Wuling Air EV! Its a new small EV with the approximate size of the Mini EV, but with sleeker styling and a lot more power and safety features that include, 2 airbags, VSA and HSA, And an electronic parking brake! Range and price is similar to the Sakura, it could fit 4 peeps with an approx height of 6ft if necessary!
Heres the link to it
https://wuling.id/en/air-ev