Say “electric cars” in the US and most people think of Tesla. It makes sumptuous electric cars that sell for $140,000 or more. Tesla is poised to bring its Model 3, an affordable electric sedan, to market in about 18 months, but what is affordable to some is well beyond the reach of others.
In China, the government wants to have 5,000,000 electric cars on the road by 2020. Very few of them will be Teslas. While stories abound of wealthy Chinese snapping up luxury automobiles, the reality is that for many Chinese citizens, the vehicles they want most are inexpensive cars suitable for basic transportation, much like the original Fiat 500 and Volkswagen Beetle.
Carlos Ghosn, CEO of Renault-Nissan plans to make precisely the low cost electric cars Chinese consumers want, even though they may never be sold outside of Asia. He says, “The Nissan LEAF is sold in China. It is a very nice car but it is selling a few hundred per month. We envision much bigger [sales] than that. We know price is a handicap. For me the solution will be a very cheap electric car.
“Obviously, however, with very low performance you can manage that. So the question is, what is the best compromise between an acceptable performance and the lowest price possible? This is something that doesn’t exist today and we are willing to find a solution. I bet there is going to be a lot of development work on very affordable electric cars.”
Chinese regulations make it essential for foreign companies to build their cars in China with a local partner in order to avoid steep import duties. Nissan is partnering with Dongfeng to make a version of the Renault Fluence for the Chinese market. Thierry Bollore, Renault’s chief competitive officer, says that he expects sales to be in the thousands of units per month.
But mass sales will depend on Nissan and Dongfeng producing a very inexpensive electric car. “The Chinese government wants more electric cars, so we say ‘yes’, but the customer wants them to be cheap and there is a limit to how much of a [government] incentive they can put on every car,” Ghosn tells Autocar.
Bollore adds that any new government legislation could force a rapid pace of change among China’s car owners. He points out that when China put regulations in place that favored electric scooters, gas powered scooters disappeared from China’s roads almost overnight. “China is typically a market where things can move very suddenly. It could move very quickly if the government decided to make it a state project,” he said. If that happens with electric cars, Nissan expects to be ready to meet the demand.