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