Wuling Hongguang Mini EV Now Available For Just $2,838 Plus $28/Month For The Battery Plan
The SAIC-GM-Wuling joint venture has recently launched a monthly battery payment plan for the blockbuster Wuling Hongguang Mini EV. After selling over 1 million units of the Wuling Hongguang Mini in less than 3 years and helping to create a new and exciting market for mini electric vehicles, the JV has now introduced a new monthly battery payment plan for several models of the Wuling Hongguang Mini. The new plan allows for customers to buy the Wuling Hongguang Mini EV starting at just $2,838, and then pay $28 per month for the battery for 5 years for the entry level mini EV.
It looks like after the 5 years, the consumers will then own the battery. The battery is not removable or swappable. This is just a clever way of lowering the barriers to entry for consumers. Before the new battery plan, the entry level Wuling Hongguang Mini EV was starting from around $4,800.
This plan actually brings the upfront payment for the Wuling Hongguang Mini in line with some of the Low Speed Electric Vehicles (LSEV) that helped provide access to affordable transportation for millions of people in China. Now one can get a much better vehicle for a similar upfront price. There are now a plethora of mini EV models consumers can choose from in China. The new battery plan could also be part of initiatives to keep the Wuling Hongguang Mini ahead of the pack in a very competitive market.
Here is a summary of the the Wuling Hongguang Mini models and battery plans:
The biggest barrier a lot of people face when it comes to getting access to their own car is the high upfront purchase prices associated with acquiring a brand new or a used vehicle. This is even harder in a lot of developing countries where the vehicle financing sector is not as well developed due to several reasons, driven mostly by the local economic situation and lower incomes. Introducing small affordable vehicles that are easy to maintain and cheap to “fuel” is one of the best ways of lowering the barrier to entry for a lot of people who need just that, a small practical vehicle to take them from A to B without a lot of bells and whistles.
A small affordable battery-electric vehicle could address this issue. Over the last couple of years, mini EVs such as the Wuling Hongguang Mini have been introduced in China and a few other countries. Priced from around $4,700, these vehicles enabled over a million people to get access to a decent affordable vehicle. We are now also starting to see “larger” small EVs that are better equipped, such as the BYD Seagull, coming onto the market for about $10,690 in China, making them cheaper than comparable ICE vehicles, such as a Honda Fit.
I asked my friends who drive an ICE Honda Fit in Zimbabwe how much they spend on petrol per month and a lot of them said between $100 to $150 per month. Now if we assume the same person were to drive a 30.8 kWh BYD Seagull and charge it to full every other day at 10 US cents/ kWh (home electricity tariff in Zimbabwe), they would be spending less than $47 per month to charge it at home, that is already less than half the $100 they were using on petrol.
For a smaller vehicle like the 9.3 kWh Wuling Hongguang Mini, and assuming they charge it to full every day at the same 10 cents/kWh, that would be less than $30 per month on charging. That’s just a third of their old petrol bill. Now if we assume a similar model to the one recently introduced in China by Wuling, renting the battery for a mini EV for $28 per month plus $30 per month for charging it at home ($58 in total) would still work out cheaper than the $100 to $150 they were spending per month on petrol. Now they could potentially get access to a small EV at a lower upfront price than an equivalent ICE vehicle, and then battery plan would be like “fueling”their car, but cheaper than buying petrol or diesel. With the added bonus of very little maintenance costs associated with EVs as compared with ICE equivalents, the switch to EVs could really put some money back into consumers’ pockets, especially in low income countries.
Battery plans and leases and rental programs are not new. Examples of where these types of plans or similar have been implemented include in Europe, where Renault had plans for the Renault Zoe a while ago to help lower the upfront payment costs for consumers, and to a certain extent help address the fears and perceived risks of battery degradation in the early days of modern EVs.
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Pay-as-you-go models helped lower the barrier for access to electricity in the small home solar system market in a lot of developing countries. Pay-as-you-drive battery loan programs could help do the same for electric mobility. BasiGo is already using its innovative pay-as-you-drive model to help catalyze the adoption of electric mini buses in Kenya. Hopefully, similar models will be introduced for electric trucks and other vehicle segments where the business case makes sense.
The majority of African countries still have very low levels of motorization compared to countries in the developed world. Only a handful of countries have motorization rates above 100 vehicles per 1,000 people. Most countries on the continent have rates below 50 passenger vehicles per 1,000 people. To put this into perspective, South Korea and Germany have rates above 500 passenger vehicles per 1,000 people. The US has an even higher rate that’s closer to 800 vehicles per 1,000 people, according to a study by Siemens Stiftung. These pay-as-you-drive models can really transform access to transportation services in a more sustainable way and improve the current low levels of motorization.
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