Earlier this month, an intriguing new Detroit-based electric vehicle startup hit the market – Slate Auto, a Jeff Bezos-backed venture offering something US buyers rarely see these days – a pick up truck billed as “affordable”.
Its base price is $24,950, making it one of the lowest-cost autos in the US market and close to half the price of the average new vehicle. But as the US contends with sharply rising auto costs, even Slate may be getting left behind in the global electric vehicle (EV) transition. The global EV industry is entering a golden age powered by cheap Chinese cars that can be bought for as little as $10,000.
About 20% of new cars sold in December in the UK were Chinese-made, as were 12% of vehicles sold throughout the last year. They also accounted for about 6.4% of European Union sales, despite a new tariff program. Chinese cars cannot be sold in the US.
The US industry’s shift is complicated by changing political ideologies and consumer demand – American buyers have gravitated toward bigger cars with all the bells and whistles, so it makes sense for domestic automakers to produce those.
But EV supporters say the US is ceding significant ground to China in this essential market. While Slate is a step in that direction, a failure to do more could have economic and national security fall out, said Dan Krassner, executive director of the American EVs Jobs Alliance, a non-profit that works to break down the political divide over electric vehicles.
“We can’t hand the whole auto industry to Beijing,” Krassner said. “EVs are the big manufacturing prize of the century, and America has to get back in the race.”
Slate began accepting preorders last week, and it could help fill a need in the domestic market. Fewer than 5% of new vehicles in the US sold for $25,000 or less last year, down from nearly 21% in 2019, according to an Edmunds analysis. During that same time frame, the average new vehicle transaction jumped about $11,000 to $48,402.
The Slate truck is one of eight new US models available for under $25,000. Compare that with China, where more than 200 EVs and hybrids are available in the same price range, according to industry analyst DCar.
The two-seat Slate truck at under $25,000 is no frills – it comes with hand-crank windows, no stereo, no speakers, no ambient lighting, a smartphone mount on the dashboard instead of a navigation system, and standard cruise control instead of adaptive. The Slate truck gets an estimated 205 miles of range, and it is small – think of Ford Rangers and other pick ups from the 1980s. At 14.5 ft, it is shorter than a Corolla.
Moreover, the $24,950 is just the starting point for a Slate, and the company offers a range of 3D-printed accessories, a stereo, a fob and an add-on that converts it into a five-seat SUV. Customers can also pay extra for vinyl wraps instead of paint, which eliminates the need for the company’s plant to include a paint shop.
But opting for those basic features quickly takes the price north. Jessica Caldwell, executive director of Insights with Edmunds, likened the Slate to a budget airline such as Rynair, which offers a cheap ticket to physically get on a plane, but the add ons that make the flight tolerable quickly add up. She is skeptical that this approach will take off with buyers in the US market.
“I don’t think they’re going for the stripped-down version because the features, amenities, and technologies – those are part of why prices in the US are so inflated, because Americans wanted all the additions,” Caldwell said.
Contrast that with the China’s BYD, which, relative to Slate, offers vehicles loaded with features such as driver’s assist at around one-third of the price. Its premium models, which list under $15,000, have a range of 314 miles. BYD is aiming to be the world’s biggest automaker within five years and already makes more EVs than Tesla.
Moreover, there is a vastly different ethos among the US and global consumers, Caldwell said. Part of the reason the cheap EV revolution may not be taking hold here is that America is the birthplace of the automobile, with a deeply rooted car culture that loves big, powerful, gas-powered vehicles.
Emerging markets in China are full of first-time car buyers who are more open to the idea that a car can be tiny, practical, cheap. Europeans, meanwhile, are used to buying smaller vehicles.
This is creating two very different markets. However, it is also true that US buyers cannot access BYDs, or other $10,000 EVs. It may be the case that if such a car were available in the US, it would take off.
Despite the disadvantages in the US EV market, Krassner is optimistic that a pivot toward the lower price point could succeed.
“The price point is really attractive, and we hope Americans see that it matches their budgets and also shows automakers that there is hunger for cheaper electric vehicles,” Krassner said.
