For years they have lived in China's regulatory shadows. Not classified as cars, but significantly larger and faster than motorcycles, scooters and mini delivery trucks.
Now the vehicle known to industry people as the "quadricycle" is finally being validated in the world's largest auto market with the recent launch of one from a local joint venture of America's General Motors. Compact, low-priced quadricycles are already popular in China, especially in less affluent rural areas, despite operating in a legal gray area outside of official recognition.
The GM joint venture -- known officially as SGMW and locally as Wuling -- sold 15,000 Mini EV quadricycles in the first 20 days after hitting the market, the company announced.
The model is typical for cars in its class, which usually sell for between 10,000 yuan ($1,442) and 30,000 yuan and can travel at speeds up to 70 kph. The Mini EV lies at the upper end of this price range, starting at 28,800 yuan for two types, with a range of 120 km or 170 km on a single charge.
Vehicles like this are also popular in Europe, where streets are often much narrower than in other parts of the world. In China, the atypical breed has grown in popularity over the last decade, especially in smaller, less developed areas where the cost of conventional vehicles can be prohibitive.
Their existence in a regulatory gray zone means people who buy them cannot obtain license plates, but on the other hand, do not need driver's licenses -- two factors that make them risky if banned in the future but convenient at present. Sales of these vehicles grew at an average of 66% annually between 2011 and 2017, with the yearly total reaching 1.3 million in 2017, according to an article citing Chen Qingtai, head of China EV100, a group of academics, administrators and others following the electric-vehicle sector.
The initial strong demand for the Mini EV may be due to its positioning as a high-quality product from a well-known name at an affordable price. Its potential to become a breakaway success comes as no surprise, said Gu Zhihong, vice president of rival minivehicle maker Fulu Group.
"Like QQ and Alto before it, the Mini EV will become a means of transportation for many lower-tier cities and villages -- a first car for young people or a second car for families," he said, referring to two earlier minicars that also enjoyed strong demand.
Beijing has aggressively promoted new energy vehicles over the last decade to deal with air pollution and develop exportable technologies. But much support over the last five years has gone to traditional larger cars, benefiting global brands like Tesla and domestic players such as BYD.
This has left quadricycle makers to fend for themselves, forcing them to be more market-oriented and self-sufficient. As a result, they have a leg up on the many larger EV makers that are now getting squeezed following sharp cutbacks in government subsidies over the last few years.
The move by the GM joint venture could be partly the result of recent signals from the EV industry regulator, which is encouraging new-energy carmakers to pursue more sales in less affluent smaller cities and villages, industry observers told Caixin. In that regard, SGMW's Mini EV launch could be a groundbreaking step that others could soon follow, they added.
If the GM joint venture is any indicator, demand for quadricycles is robust. SGMW says it has already received orders for nearly 50,000. The strong reception has led the China Passengers Car Association to predict that the Mini EV will be one of two "champion" cars of the year, alongside Tesla's Model 3, which has seen strong growth since it began production in Shanghai. In anticipation of the demand, SGMW is raising capacity to make 20,000 Mini EVs per month.
A key factor for the industry in the future will be how quadricycles are ultimately classified. The industry has its fingers crossed that they will be designated as motorcycles rather than cars, because more stringent licensing procedures and manufacturing requirements for cars could wipe out many smaller players.
Read also the original story.
Caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Nikkei recently agreed with the company to exchange articles in English.