BEIJING -- On the showroom floor of a SAIC-GM-Wuling Automobile dealership in Chongqing, a salesman enthusiastically recommended the Wuling Hong Guang Mini EV, an electric car that has quickly won over Chinese drivers since its nationwide launch in July.
The boxy compact lives up to its name, measuring less than 3-meters long and 1.5-meters wide, yet can still accommodate four people. The price starts at 28,800 yuan ($4,460), though the most popular model, with air conditioning, goes for just over $5,000.
"If you make a 13,000 yuan down payment, the rest will be interest-free," the salesman said.
Though the Hong Guang Mini lags well behind offerings from the likes of Tesla when it comes to range and performance, its convenience and low price have made it one of China's bestselling "new-energy" vehicles, a category that includes electrics and plug-in hybrids.
The compact has been a big hit for state-owned SAIC Motor, China's top automaker. SAIC holds a majority stake in SAIC-GM-Wuling, the joint venture that produces and sells the car and is known locally as Wuling, and General Motors is a major shareholder as well.
Marketed as "the people's commuting tool," the basic model can travel 120 km on a full charge and has a top speed of 100 kph -- good enough for day-to-day driving for most consumers. It does not use a cutting-edge battery, which helps keep the price down, and it can conveniently be charged from a standard outlet.
The car sold 112,000 units between July and the end of 2020, ranking second for the year behind Tesla's Model 3, but first on a monthly basis. It is also believed to be the second-best-selling electric model worldwide, again behind only the Model 3.
"Consumers give high marks to its low cost and its design," said Alan Kang, an analyst at British research firm LMC Automotive.
"It's sold especially well in Henan and Shandong provinces," Kang said. Small, cheap electric vehicles that can be operated without a license -- but cannot be driven on highways -- have taken off in these areas in particular.
Some drivers of these micro-vehicles are trading up to the Hong Guang Mini. Third-tier cities account for more than 60% of the car's total sales, according to Chinese media.
The compact could make an appearance outside China as well. Wuling said last August that it plans to export the Hong Guang Mini, and media reports indicate that it has partnered with a Latvian automaker to sell a version of the car in Europe, though the price is reportedly set to be twice as high due to Europe's environmental requirements.
Great Wall has climbed to sixth in the "new-energy" car market thanks to the popularity of its Ora EV brand.
© Reuters
Like SAIC, Great Wall Motor has also enjoyed a boost from sales of budget electric cars. Its sales of new-energy cars in China jumped 45% by volume last year, lifting it to No. 6 in the market. This was thanks in large part to the Ora R1, also known as the "Black Cat," with its cute design and 70,000 yuan price tag.
"There was a lot of support from consumers whose incomes fell due to the coronavirus," said a staffer at a dealership in Hebei Province.
Meanwhile, high-end electric vehicles have also been performing just as well in sales, with Tesla tripling its sales volume in China. The Model 3 sells for about 250,000 yuan, even after price cuts following the launch of onshore production of the vehicle.
"Purchases from the middle class have grown due to the pent-up urge to spend from being unable to go on vacation overseas," said an industry source.
Chinese EV startups seeking to become the next Tesla have gained as well. Nio has more than doubled its unit sales, putting the company eighth in new-energy vehicle sales last year, up from 13th place. Li Auto multiplied its unit sales 25 times to reach 10th place.
Altogether, China's five largest EV startups, including WM Motor and Xpeng, expanded unit sales by 150% last year.
To offset the effect of the coronavirus epidemic, local governments enacted programs to stimulate consumption, and rolled out policies to support the mainstreaming of electric vehicles. These factors have buoyed the domestic market.
Liuzhou, the city that serves as Wuling's headquarters, extended 1,000-yuan vouchers and offered to partially cover electric bills.
The Chinese government plans to have new-energy vehicles account for half of new auto sales by 2035. The market for new-energy passenger vehicles will expand by 45% this year, according to a projection by LMC.
Major global automakers will likely come back strong in China's electric vehicle race. Volkswagen, which has led all vehicle sales in China, boosted sales of new energy vehicles by nearly 50% last year.
