EV for Fun?
After dismantling the vehicle the team found that a number of systems that are common to pure electric vehicles were not present. In most EV’s there is a brake energy recovery system that converts the thermal energy produced by braking into electrical energy and stored in the battery to extend the vehicles cruising range. As this was not present in the MINIEV, its range is limited to a bit over 100 miles, limiting it to local use, however it also reduced the cost by ~$380. The water cooling system usually found in EVs was also eliminated in favor of an air cooling system and the Inverter, which converts DC power from the battery into AC for the motor, has a lifetime of ~8 years or ~75,000 miles as opposed to a more typical 20 years and ~125,000 miles.
While the elimination of such sub-systems goes toward reducing costs, the real gains are made by using off-the-shelf parts, which do not require special development costs. Many of the parts used meet household appliance standards, not more reliable automotive standards, so while the cost is low, the vehicle is more likely to fail. In order to compensate for the higher potential for maintenance problems, the company has put the more delicate components in modules, which make their replacement considerably easier, albeit a bit more expensive.
In terms of the overall cost of the vehicle, the team found that the cost of the battery system alone accounted for just under half of the cost of price of the vehicle, and even the Chinese government could not rationalize the losses being generated by some of the vehicle’s suppliers, given its robust sales. Inquiries into those supplying motors found that the ~$3.01m in sales had generated only $415,000 in losses, which were such a small part of the company’s business that they made little difference. The government asked that supplier make sure investors were informed of the potential risks, while the suppliers extolled continuing increases in sales, ‘ushering in a booming development opportunity.’
However, when it came down to the actual BOM, from the manufacturer itself, the total profit for the vehicle came to less than 89 yuan, which is the equivalent of $13.96 currently, a rather thin margin, which was similar to an estimate made by a person said to be close to the manufacturer, who pegged the profit at 100 yuan, or $15.69. The vehicle, considered the least expensive pure EV in China and the most popular, is quite popular among the under 30 set and has become a bit of a fad, with many owners modifying the car to stand out graphically. Comments from owners indicating that there are few chances to buy a car for the price of 3 iPhones, seems to indicate that the demand, regardless of the potential limitations, will remain, but the real question is how long can the company continue to produce such vehicles at such a small margin.