Even as battery costs rise, automakers are rolling out more affordable electric vehicles that should broaden their appeal to a larger group of buyers.
The latest EV option came Thursday from General Motors, a small Chevrolet Equinox SUV with a starting price of around $30,000 and a range per charge of 250 miles. You can get 300 miles of range if you pay more.
GM won’t release exact pricing for the Equinox EV until it goes on sale around this time next year. But the SUV sits at the bottom of Edmunds.com’s price list for electric vehicles sold in the United States, where the average cost of an EV is around $65,000.
Achieving a price tag of around $30,000 and a range per charge of nearly 300 miles is key to getting mainstream buyers to ditch gas-powered vehicles, industry analysts say.
“You’re kind of at this sweet spot,” said Ivan Drury, chief information officer for Edmunds.com. “You’re basically at the price point that everyone is clamoring for.”
Auto industry analysts say if the Equinox makes efficient use of interior space with plenty of cargo and passenger space, and if it’s similar in styling to today’s small gas-powered SUVs, it should be a hit. in the most popular segment of the American automobile. market. About 20% of all new vehicles sold in the United States are compact SUVs.
“It’s a perfect vehicle for many different users, whether it’s a small family or an empty nest,” said Jeff Schuster, president of global forecasting for LMC Automotive, a consulting firm in the Detroit area. “You have space to carry stuff, but it’s easy to drive.”
A $30,000 EV that ticks all the boxes is just a little above the price of a comparable gas-powered small SUV. The best-selling Toyota RAV4 in the segment and the best-selling vehicle in the United States that isn’t a pickup, starts at just over $28,000.
Until recent years, electric vehicles were either expensive and aimed at affluent luxury buyers, or cheaper but with limited ranges. For example, a base version of Tesla’s Model 3, the lowest-priced model of America’s top-selling electric vehicle brand, starts at over $48,000. A larger Tesla Model X SUV starts at over $120,000.
The only EVs with a starting price below $30,000 (including shipping) are now versions of the Nissan Leaf and Chevrolet Bolt. Both are smaller than a typical gas-powered compact SUV. The Mini Cooper Electric, Mazda MX-30 and Hyundai Kona Electric are in the $30,000 range, according to Edmunds.
Kia Niro EV, Hyundai Ioniq 5, Ford F-150 Lightning Pickup, Volkswagen ID.4, Kia EV6, Toyota bZ4X, Ford Mustang Mach-E, Audi Q4 e-tron, Subaru Solterra, the Polestar 2 and the Tesla Model 3 all start at around $40,000.
GM may struggle to keep the Equinox price around $30,000, largely because there are a finite number of mines of minerals such as lithium, copper, cobalt, and nickel that are key battery components amid growing demand as nearly all automakers introduce new electric vehicles.
Drury says that even if GM is able to keep the Equinox around that price, demand will likely be high enough that the company will mostly build more expensive versions.
And some dealerships have marked up EVs above the automaker’s list price due to increased demand. In the first half of the year, sales of electric vehicles in the United States increased by 68% compared to the same period a year ago, to reach nearly 313,000.
Some EVs could be much cheaper in the US with federal tax credits starting next year of up to $7,500 that are part of the Cut Inflation Act. But meeting federal requirements can be difficult.
Vehicles and batteries must be assembled in North America, and the new law requires battery minerals and parts to be sourced from the continent. Most minerals such as lithium, a key ingredient in batteries, are now imported from China and other countries.
The Equinox checks the North American assembly box. It will be made in Mexico. The company won’t say where the battery will be made, but GM announced three joint venture battery plants in the United States, including one already operating in Warren, Ohio.
From there, GM works to meet the other criteria for obtaining the tax credit. “We’re really working through rules and regulations right now,” said Steve Majoros, vice president of marketing for Chevrolet. “We think everything is lining up nicely, but more details to come on that.”
Majoros hinted that it might take a few years to meet all of the government’s requirements to get full credit as GM takes more control of its supply chain for electric vehicle parts.
The Equinox EV, Majoros said, is longer and wider than the gasoline version of the same vehicle. GM used new interior packaging methods to create passenger and cargo space comparable to that of the gasoline-powered Equinox, he said. The relatively small price difference between the two should entice many customers to consider electric vehicles over gas, he said.
“He does a lot of things right,” he said. “So when he does that, the volume (of sales) follows.”
GM chief executive Mary Barra said the company will overtake Tesla as the nation’s biggest seller of electric vehicles by the middle of this decade. The Equinox EV is a step in that direction.
“We believe this will be one of the products that will really help this mainstream adoption take off in the market,” Majoros said.