Such is the current cost of the battery that, when fitted to a supermini to give an acceptable driving range, it becomes on average 60% of the total build cost, according to recent analysis by the bank Bernstein. However, because of the higher pricing power of cars in the class above, the battery share of the build cost falls to 40%, better hiding the cost.
Car makers obviously try to achieve the same profit margins on EVs as ICE cars, but it’s almost impossible to pass them all on to the buyer of a supermini, Bernstein reckons. Purchasing incentives are making these small cars viable in many countries across Europe, but not in the UK, where all the enticement is aimed at company car drivers, who don’t tend to choose superminis. The only supermini to make the EV top 10 to the end of October in the UK was the electric Mini.
That pricing hump means that affordable EV trailblazer MG won’t switch to an electric powertrain for the replacement for the MG 3, which rivals the Dacia Sandero at the budget end of the market. “Developing a small electric car is only marginally cheaper than developing a bigger car,” UK commercial director Guy Pigounakis said. “Then half the price is battery so it becomes a £25,000 car, which is unaffordable”.
However, electric superminis are in the pipeline. The VW Group is planning a trio of small electric cars for the Volkswagen brand, with Skoda and Cupra variants to follow in 2025 with an entry price target below £22,000. All are expected to be produced in the same Spanish factory to increase the scale effects and they’re likely to use a cheaper iron-based battery chemistry of the type that has helped MG reduce the price of its 4 compact hatchback to less than £26,000.
The trick is of course to persuade the customer to pay more and hope you cover the extra cost of batteries that way. For example, the Spanish-badged version of the small VW Group EV will be an upmarket Cupra, previewed by the Urban Rebel, rather than a budget Seat.
One or more of the trio is likely to be styled to resemble a small SUV, a trick that has paid dividends for car makers over the past six or more years as they looked to increase the price customers are prepared to pay for combustion-engine superminis.