Chinese factory worker Weng Changqing knew he wanted an electric car before he even had his driver’s license. Living in a small town in eastern China and looking to start a family, he figured the savings on gas and maintenance would allow him to afford to buy his first ride.
He wasn’t in the market for a Tesla Model 3, which starts at about $38,000 in China. Instead, the 37-year-old bought a 66,900-yuan ($10,000) crossover from local electric-vehicle maker Hozon Auto. It’s one of a growing number of vehicles that run on batteries and electric motors gaining popularity in lower-income parts of the country because of their modest prices and lower running costs. (EVs don’t need oil changes, spark plugs, or the various belts that have to be replaced periodically on gasoline cars.)
Cheap, reliable EVs like Changqing’s have the potential to open car ownership—and the increased mobility that brings—to a whole class of people who previously couldn’t afford to have their own wheels. Changqing estimates the cost of electricity to charge his car for an entire year to be less than $400, which would buy only 377 liters (100 gallons) of gasoline in China—enough to drive about 6,300 kilometers (3,915 miles) in a 2020 Trumpchi GS3 crossover from Guangzhou Automobile Group Co.
“These ultracheap EVs are reaching a new customer in China, as they likely will in other markets as prices come down,” says BloombergNEF analyst Siyi Mi. EV prices are on track to reach parity with fossil fuel-powered cars in the next four to six years, at which point annual sales will start to skyrocket, reaching 25 million in 2030, up from about 2 million a year currently, according to BNEF.
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