The Logic Behind the Surge in Sales of Mini Electric Vehicles

When it comes to micro electric vehicles in the new-energy vehicle market, their sales performance has been as unpredictable as a roller coaster. In recent years, China vigorously promoted new-energy vehicles, and as a result, micro pure electric cars once dominated nearly half of the market. However, with the gradual upgrading of consumer preferences, the market for these compact EVs began shrinking rapidly, leading to a sharp decline in sales. Many industry insiders even predicted that the "golden age" of micro pure electric cars was over for good. But since SAIC-GM-Wuling launched the Hongguang MINI EV, this segment has experienced a remarkable resurgence, with sales soaring once again and its market share steadily expanding. In fact, the Wuling Hongguang MINI EV has even surpassed Tesla’s Model 3, climbing to the top spot on the sales charts. No wonder automakers are now eyeing this niche market with great interest, rushing to introduce their own models in the same category—such as the Benben E-Star National Edition, the Sihao E10X, the Punk Duo Duo, and the Leiting Mango. With so many new players entering the scene, what was once a relatively quiet market is now buzzing with excitement and competition.

Additionally, a large number of similarly positioned models are already on the way—such as Chery QQ Ice Cream, set to launch in the fourth quarter, along with Lingbao OO and Dongfeng Fengguang MINI EV, as well as Dongfeng Sokon Candy—all of which have been listed in the MIIT’s announcement. Looking ahead, we can expect even more micro electric vehicles from various manufacturers, each sporting distinct branding yet sharing similar designs and largely overlapping market positioning, flooding into the market one after another. So, why are these micro electric vehicles—once plagued by steep sales declines—suddenly gaining popularity again today?
According to the latest data from the China Passenger Car Association, new-energy vehicle sales totaled 333,000 units in September, representing a year-on-year increase of 202%. Meanwhile, from January to September, cumulative sales of new-energy vehicles reached 1.818 million units, up 203% compared to the same period last year. The continued surge in the new-energy market has unexpectedly turned many domestically branded models—and even some previously niche-market segments—into instant online and offline bestsellers, including the currently popular mini electric cars. It’s worth noting that one of the key reasons behind the earlier decline in sales of mini pure electric vehicles was the phasing out of government subsidies. Specifically, the newly introduced subsidy policy for new-energy vehicles set the minimum range requirement at 250 km; unfortunately, many mini EVs on the market fell short of this threshold, leaving them ineligible for the desired financial support.
However, although they didn’t receive support from subsidy policies, the subsequent dual-credit policy subsequently created new opportunities for micro pure electric vehicles. According to relevant policy requirements, all domestic automakers and car importers with annual sales exceeding 30,000 vehicles must comply with two key credit policies: the average fuel consumption credit and the new-energy vehicle credit. As a result, micro pure electric vehicles—characterized by low production costs and relatively modest technological demands—naturally became an effective strategy for major automakers to earn these crucial credits.

The favorable policies have also spurred rapid innovation in the micro electric vehicle market. Currently, the primary regions where vehicles in this segment are selling well remain concentrated in several first-tier cities with license plate restrictions, as well as in third- and fourth-tier cities and county-level areas. However, given that first-tier cities already boast high consumer spending power, the market share of micro EVs there has been significantly squeezed. As a result, third- and fourth-tier cities, along with county-level areas, have emerged as the markets with the greatest untapped potential for demand for micro pure electric vehicles. This is because, in these smaller cities, consumers tend to have more limited mobility needs, making micro EVs—boasting longer ranges, greater convenience, and cost-effectiveness—the ideal choice. A prime example of this trend is the "Liuzhou Model," developed through the collaboration between Liuzhou in Guangxi Province and SAIC-GM-Wuling.
Driven by automakers and local initiatives, Wuling's compact electric microcars have become the region's primary mode of transportation. As a result, Liuzhou is now known as "China's New Energy Vehicle City," setting a remarkable example for the wider adoption of green mobility solutions. According to conservative estimates, the number of low-speed electric vehicles in China has already surpassed 6 million units, with the majority concentrated in third- and fourth-tier cities. Historically dominated by a mix of lesser-known electric brands, this market is undergoing significant transformation: in recent years, the government has gradually introduced policies aimed at streamlining, upgrading, and regulating the low-speed EV sector. As a result, the market value of this segment is expected to soar into the hundreds of billions of yuan—making it an incredibly attractive opportunity for microelectric vehicle manufacturers.

At prices comparable to the "Lao Tou Le" models, yet boasting superior aesthetics, quality, and performance—plus the backing of established automotive giants—combined with Wuling's relentless efforts to turn these micro electric vehicles into trendy, culturally iconic products, it’s no wonder that automakers are scrambling to enter this lucrative market. Moreover, the continued strong sales in the micro EV segment have reignited hope among major automakers, prompting them to roll out new, cutting-edge compact electric models and further fueling growth in this niche segment. From industry leaders like Great Wall Motors, SAIC-GM-Wuling, and BYD Auto, to the rising forces of the EV startup scene, all are pouring significant resources into developing outstanding micro pure-electric vehicles. In fact, it was the meteoric success of Wuling Hongguang MINI EV that suddenly catapulted the micro EV segment into the spotlight. Yet, a new question arises: With so many micro EVs flooding the market and fiercely competing for share, will this segment continue to enjoy the same runaway popularity as the Wuling Hongguang MINI EV does today? Or could the sheer influx of diverse models ultimately scramble the market, leaving consumers overwhelmed and confused?

Actually, although more models at the same price point are entering the market, not every single one will become as popular as the Wuling Hongguang MINI EV. The entry of numerous automakers will also help make this niche segment more rational, fostering a natural process of survival of the fittest—beneficial both for consumers and the automotive industry as a whole. But why is that? Let’s take a brief look at the reasons. First of all, micro pure electric vehicles cater to a genuine need among everyday consumers. In many third- and fourth-tier cities, low-speed "old man cars" already dominate daily commuting, and we hardly need to elaborate on the drawbacks of these vehicles. Yet, despite their limitations, this market holds enormous untapped potential. For instance, it’s reported that Shandong Province alone has seen production and sales of low-speed electric vehicles exceed 700,000 units. If this "gray-market" industry isn’t properly regulated and allowed to grow unchecked, its scale could even soar to unprecedented levels in the future.
So, the essential demand certainly exists. And since this demand is there, the market will naturally avoid stagnation. Moreover, micro electric vehicles can effectively cater to the stable consumer market (C-end) while also tapping into the vast opportunities of the business-to-business market (B-end). In major cities, micro EVs can even earn green license plates and are exempt from driving restrictions—plus, in many urban areas, they come with perks like free parking and the ability to use bus lanes during morning and evening rush hours. These advantages have already convinced many people with genuine needs to opt for a micro electric vehicle. Additionally, micro EVs are affordably priced, making them an increasingly attractive choice in today’s fiercely competitive shared mobility market. With their cost-effective benefits, they’ve emerged as the ideal solution for urban transportation needs—especially in smaller towns, where they not only enhance residents’ daily commutes but also help address a wide range of everyday travel challenges.

Finally, at the corporate level, we’re all familiar with automakers’ dual-credit policy. For automakers with higher fuel emissions, how do they manage to meet the annual dual-credit targets? This is where micro electric vehicles truly shine—though these companies may not turn a profit from manufacturing and selling cars, they can still earn valuable credits in return. For enterprises that have to spend money to buy credits, this becomes a lifeline—a tangible source of real revenue. Data shows that in 2020, SAIC-GM-Wuling’s passenger vehicle sales reached 932,700 units, with new-energy passenger vehicles accounting for 178,300 units—60% of which came from the Wuling Hongguang MINI EV. As a result, the company generated 443,141 tradable new-energy vehicle credits. If calculated at 3,000 yuan per credit, SAIC-GM-Wuling could earn approximately 1.3 billion yuan from trading these credits—far surpassing the revenue earned purely from car sales.
There’s also the issue of vehicle manufacturing costs. In the past, very few automakers could keep the cost of a car below 30,000 yuan—until Wuling Hongguang MINI EV hit the market, suddenly showing everyone that "it turns out micro electric vehicles priced at just 20,000 or 30,000 yuan can be built this way." In fact, several low-speed electric vehicle manufacturers, such as Punk and Reeding, have already introduced products that closely resemble the Hongguang MINI EV, with prices hovering around the 25,000-yuan mark. However, these vehicles don’t offer particularly long ranges—typically between 130 and 200 kilometers—and you shouldn’t expect too much in terms of quality or safety.
Many people believe that the Wuling Hongguang MINI EV is being sold at a loss, but that’s actually not the case—this model has already reached the point of breaking even. Besides relying on volume to achieve balance, the overall advancement of the industry itself has also played a crucial role.
Although many automakers have joined this wave, bringing temporary chaos to the industry, from another perspective, it will also further boost the development of the industrial chain.

As competition intensifies, automakers will step up their efforts in research and development as well as innovation, enabling them to further reduce the cost per vehicle. This way, even micro pure electric vehicles priced at just 20,000 to 30,000 yuan can turn a profit without relying on mandatory auto-fuel credit subsidies. Moreover, we’ll likely see an increasing number of personalized model versions hitting the market, giving consumers more choices—such as the various unique variants recently introduced by Wuling Hongguang MINI EV, or the "modification craze" encouraged by manufacturers among car owners. In short, the micro-electric vehicle market is set to become even more exciting in the future, ultimately benefiting consumers. As we mentioned earlier, given the robust demand for these compact EVs, sales are expected to remain strong—but it’s not entirely certain, as numerous uncertainties still lie ahead.
As more and more competitors enter the market, it’s becoming increasingly crowded—not only domestic automakers, but also numerous international brands are joining this growing lineup. At the end of 2020, Toyota launched the compact electric model C+pod in the Japanese market, positioning it as a micro-sized EV. Equipped with a 9.06 kWh battery, the vehicle offers a WLTC-certified range of 150 kilometers, with a price ranging from 1.65 million to 1.716 million yen (approximately RMB 104,300 to RMB 108,500). Designed specifically for urban commuters, this car is actually quite similar to Wuling Hongguang MINIEV.

Shortly after Toyota launched the C+pod, Citroën’s Ami also made its official debut in China. This two-seater micro-electric vehicle boasts a range of just 70 kilometers and a top speed of 45 km/h. It can be fully charged in as little as 3 hours using a standard 220V household outlet. Meanwhile, many Chinese automakers—ranging from established full-fledged vehicle manufacturers to companies that have transitioned from producing low-speed electric vehicles—are now vying for a share of the market. Ultimately, competition in the entry-level segment will inevitably hinge on price. Looking ahead, replicating the blockbuster success of Wuling Hongguang MINI EV will undoubtedly prove to be an incredibly challenging feat.
Although micro electric vehicles are popular in third- and fourth-tier cities, they’ve encountered不少 challenges in first-tier cities. Take Shanghai’s recent restriction on issuing green license plates for these vehicles, for instance—this clearly impacts demand in major urban centers, thereby reducing the visibility of micro EVs in first-tier markets. Thus, for other latecomers entering first-tier cities, the real significance lies not just in boosting sales volume, but also in helping to establish micro electric vehicles as a trendy, urban-style product. Whether more cities will follow Shanghai’s lead in imposing similar restrictions on micro EVs remains to be seen.
Additionally, micro electric vehicles are designed only to address short-distance travel needs and cannot be considered fully versatile transportation tools in the traditional sense. Their usage scenarios are thus significantly limited, which also hinders further market growth. The most obvious drawbacks include range and charging efficiency—currently, most micro electric vehicles support only slow charging, and their ranges typically stay within 200 km.

Slow charging has also placed higher demands on the charging infrastructure. If you don’t have a home charging station and rely solely on public slow-charging piles outside, it’s clearly quite inconvenient—especially in big cities, where these charging stations are becoming increasingly scarce. Moreover, as winter approaches, vehicle range can drop significantly, further limiting users’ travel radius. Micro electric vehicles also raise serious safety concerns. While the absence of a display screen might still be somewhat understandable—after all, it’s often just an optional feature—it’s unacceptable for some models to lack even basic amenities like air-conditioned cooling. For users living in southern regions, this would undoubtedly make driving extremely uncomfortable. Even more alarming is the fact that certain models fail to equip even essential safety features like airbags, which is deeply troubling. Of course, cost constraints inevitably play a role, but at the very least, fundamental safety measures should never be compromised. Thus, whether the micro-electric vehicle industry will continue its rapid growth trajectory in the future remains highly uncertain.
In summary, it’s undeniable that China’s micro-car electric vehicle market still holds tremendous potential, and the strong sales of mini EVs are likely to continue for quite some time. However, the likelihood of seeing another game-changing product like the Wuling Hongguang MINI EV again is relatively low. As the existing stock of low-speed electric vehicles gradually upgrades and transitions into higher-end models, consumers are becoming more inclined to embrace vehicles at the next level up. Consequently, demand in this segment will inevitably decline further, potentially bringing an end to the current surge in micro-EV sales. Therefore, automakers shouldn’t solely focus on developing micro-electric vehicles—instead, they should prioritize deeply understanding and aligning with consumer needs, as that’s where the real opportunity lies.

Translated from Sina Auto

Email:
info@adtfm.com

Phone:
021-20532053

Address:
2nd Floor, No. 150 Jindian Road, Pudong New Area, Shanghai