EV makers target compact SUVs to entice average drivers to buy EVs
In their early deployments of electric vehicles, US automakers targeted people who value short-range fuel-efficient cars. Then came electric vehicles for luxury buyers and van and delivery van drivers.
Now companies are focusing on the heart of the US auto market: people who want a compact sport utility vehicle.
In their drive to make electric vehicles dominate vehicle sales, automakers are promoting their new models as having the range, price and features to rival their gas-powered rivals.
Some are proving popular so far. Ford’s $45,000+ Mustang Mach E is sold out for the model year. On Monday, General Motors’ Chevrolet brand introduced an electric version of its Blazer, starting at around $45,000 when it goes on sale next summer.
Also coming next year is an electric Chevy Equinox with a base price of around $30,000, a price that could boost its appeal to lower-income households.
There’s also the Hyundai Ioniq 5 and Volkswagen’s ID.4 in the $40,000 range and Nissan’s upcoming Ariya around $47,000, with a cheaper version coming soon.
All start considerably cheaper than Tesla’s Model Y small SUV, the current best-selling EV, which starts at well in the $60,000 range.
The new models — which can travel about 300 miles per electric charge — are aimed at the largest segment of the U.S. market: midsize sport utility vehicles, which account for about 20 percent of new-vehicle sales.
Industry experts say entering the smaller SUV segment, with its reach to a wider demographic of buyers, is sure to boost electric vehicle sales.
“Going to the smaller utility segment gives you the ability to access the largest number of customers,” said Stephanie Brinley, analyst at S&P Global Mobility. “To make a transition. . . to electric, you need to be in more space. You need to be in more price ranges. You must be in more sizes.
Brinley said small and midsize SUVs meet the needs of many people, unlike previous electric vehicles.
“If it’s a price you can achieve but it’s a product you can’t put your kids and your dog into, you’re not going to buy it,” she said.
Chevolet says the Blazer will get a minimum of 247 miles per charge. High-end versions could go up to 320 miles.
The Blazer will be available with Chevrolet’s SS performance package with a zero-to-60 mph time of under four seconds. There will also be a police version.
“In the beginning, the demographic of an EV buyer was definitely someone with maybe a higher education, a higher family income,” said Steve Majoros, chief marketing officer for Chevrolet. “It’s very indicative of early adopters. But, as we move up that curve, certainly the intent and pricing of this product is to make it more available to more traditional buyers.
To appeal to buyers of modest means, prices for electric vehicles need to be even lower, in the $30,000 to $35,000 range, said GM chief executive Mary Barra. Electric vehicles, she said, also need to have the range and the charging network, so they can be the only vehicle some people own.
“Most electric vehicle owners today own multiple vehicles, so they have an internal combustion vehicle to jump into depending on their needs,” Barra said.
Automakers have pushed to fully restore a $7,500 tax credit for people who buy electric vehicles to boost sales. But the measure is blocked in Congress.
This is especially important for GM, Tesla and Toyota, which have maxed out the number of credits allowed to them and can no longer offer them to buyers. Other automakers are also approaching the limit.
The money for the credits, along with funding for additional electric vehicle charging stations, was in President Joe Biden’s $1.8 trillion Build Back Better social and environmental bill, who nearly died because of it. objections from U.S. Senator Joe Manchin, DW.V.
Even without the tax credit, Edmunds.com says electric vehicles now account for about 5% of new vehicle sales in the United States, with 46 models on sale.
Brinley predicts market share will grow to 8% next year, 15% by 2025 and 37% by 2030.
“It looks like the number of choices is growing exponentially for electric vehicles as we move forward,” said Erich Merkle, Ford’s chief U.S. sales analyst.
Demand for battery-powered vehicles and gasoline-electric hybrids has increased with soaring gasoline prices this year. Dealers report that each vehicle delivered is usually already sold or gone shortly after it arrives.