A budget electric vehicle (EV) selling in China for $4,500 is now outselling Tesla’s higher-priced cars. The inexpensive Hong Guang Mini EV is proving successful for state-owned SAIC Motor, China’s top automaker. It is being built as part of a joint venture with US car giant General Motors (GM), called SAIC-GM-Wuling.
In January, sales of the budget EV in China were around double those of Tesla, which faced questions over safety issues in China recently.
While the $4,500 Hong Guang Mini is the most popular model, there is an upgraded one with air conditioning for just over $5,000. The cars are being marketed as “the people’s commuting tool”.
Car experts have said that while it lags well behind Tesla regarding its battery, range and performance, its convenience and low price have made it one of China’s bestselling “new-energy” vehicles. The basic model – which was launched in 2020 – has a top speed of 62mph. It’s meant to accommodate four people… but that admittedly could be a tight squeeze.
“China’s government is serious about pollution reduction and becoming the global lead in adopting and promoting innovation of electric vehicles,” Shaun Rein, managing director of the China Market Research Group. “We remain very bullish on the adoption of budget EVs like the Hong Guang Mini to higher end ones like NIO and Tesla.”
To promote EVs, the Chinese government offers free license plates to buyers and the vehicles are guaranteed. In many cities, it can take months – if not years – to get a license plate for a petrol engine through various auction systems.
The Hong Guang Mini EV saw sales of 112,000 for the second half of 2020, ranking second behind Tesla’s Model 3, which are made in its Shanghai factory. In January, Hong Guang Mini sales outstripped Tesla almost two-to-one. It is now believed to be the second-best-selling electric model worldwide behind the Model 3.
China is Tesla’s largest market after the US. High-end electric vehicles have been performing well there, with Tesla more than doubling its sales in China last year.
The Hong Guang Mini EV could make an appearance outside China, as Wuling has said it plans to export the EV overseas.
“China has so many makers of small and cheap electric vehicles; however, most of them are low-quality and low-speed products that do not appeal to a wide market,” said Sam Fiorani, at Auto Forecast Solutions. “The Hong Guang Mini is the first time a major company has stepped up with a simple EV that targets buyers looking for a real car.”