Bloomberg Asks Why Electric Cars Today Are So Huge

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The UK has a long tradition of small cars, exemplified by the original Mini but including a gaggle of MGs, Triumphs, Humbers, Hillmans, Cortinas, Austins, and the like. Mostly they were small because raw materials were scarce after World War II, but also because Britain taxed cars based on horsepower. Smaller cars were lighter, which means they could make do with less powerful engines. While all of that is true historically, it does not explain why most electric cars sold in the UK today are so big and heavy.

Bloomberg correspondents Olivia Rudgard and Kyle Stock spent some time driving around London behind the wheel of an Ora Funky Cat. At just over 4 meters (13 feet) in length, the four door, five passenger hatchback proved to be an able and efficient vehicle for use in that environment. For some perspective on size, the Maxda MX5 — known as the Miata in North America — measures 12.8 feet in length. [Note: The Funky Cat appears to be very similar in size to a first-generation Nissan LEAF.]

Of the 72 electric cars available in the UK, nine have batteries with a capacity under 50 kWh. (Just two EVs in the US have such small batteries.) Between 2013 and 2022, new sales of every type of car declined in the UK — except SUVs, whose sales have risen 75% over that period according to the Society of Motor Manufacturers and Traders (SMMT). In August, tests by Which?, a consumer group, identified 161 cars too big for standard UK parking spaces, up from 129 in 2018.

Small cars like the Fiat Punto and the Ford Fiesta have been discontinued and replaced with SUVs in recent years, says Ralph Palmer, UK electric vehicles & fleets officer at Transport & Environment, which tracks the new and used car markets. “They’re seeing that there are great profit margins to be made from selling a massive SUV for a far higher margin, but selling fewer of them,” he said.

Electric Cars — How Much Is Enough?

This shift in the marketplace, especially when it comes to electric cars, is creating a dearth of options for commuters looking to buy only as much car as they need. The Ora Funky Cat with its 48 kWh battery has a range of 320 kilometers (about 200 miles). As Rudgard and Stark discovered, that is more than ample range for urban driving. After a weekend of shopping and hauling furniture from IKEA, they still had nearly a 50% state of charge remaining in the car’s battery. The car’s dimensions mean it is closer in size to those iconic British cars of old, which is a plus in crowed urban environments where a car can be more of a logistical nightmare than a convenience.

Despite its appealing looks, ample leg and head room, and ability to tote stuff, especially with one or both rear seat backs down, the Ora Funky Cat has one disadvantage. It sells for £31,995 ($39,000). In comparison, the battery-electric MINI is priced at £32,550, which is 42% more than the gasoline-powered version.

It’s The Price, Stupid

Therein lies the problem that bedevils the EV revolution. The price of renewable energy keeps going down, down, and down some more. As a result, renewable energy is pushing out fossil fuels in the electricity generation market. But when it comes to electric cars, the promise that they would become cheaper as production volumes increased has not materialized as much as hoped.

There are any number of reasons for that, chief among them massive disruptions in supply chains attributable to the Covid-19 pandemic. But there are other factors as well. Batteries take up a lot more room per unit of energy than gas tanks, which makes it easier to electrify bigger cars.

In addition, drivers have come to believe they need a minimum of 300 miles of range even though they actually drive only a tenth of that on an average day. Charging networks other than Tesla’s Supercharger system are abysmal, making driving electric cars a chore rather than a pleasure for drivers.

Then there is greed, a basic component of human nature that can never be ignored. Manufacturers make bigger profits on large cars than they do on small cars, and so they spend millions touting the allure of larger vehicles. They have also pruned their model lineups to eliminate smaller, less profitable cars.

Sedans have disappeared from the showrooms for American manufacturers. Gone are the Impala and Malibu, the Focus and Fiesta, and the Dart. Today, Americans would rather drink a bucket of warm spit than drive a small sedan. The Honda Accord today is twice as large and weighs twice as much as the original. The Toyota Corolla and Hyundai Elantra soldier on, but their sales are dropping.

The Embiggening Of Automobiles

All those factors led to what Bloomberg calls the “embiggening” of automobiles, especially electric cars. The average vehicle sold in the US last year weighed 4,329 pounds, while the average UK car was about 1,000 pounds lighter, according to the RAC Foundation in the UK.

Vehicles for Americans keep getting larger. Manufacturers are rushing to get three-row SUVs into production because you never know when you might need to transport the entire starting lineup of a hockey team to the nearest ice rink. Meanwhile, most of those oversized vehicles do what vehicles have always done — transport one or two people to work, or school, or the mall and back again.

When it comes to electric cars, those larger vehicles are a blessing because there is lots of room to shove in bigger and heavier battery packs. Of course, that raises prices, which squeezes more people in need of basic transportation out of the market. US states and many nations are putting mandates in place that require a certain percentage of new car sales be electric cars, but will enough people be able to afford them, especially as interest rates ratchet up?

Electric Cars & The Unseen Hand

Manufacturers want to build only the most profitable cars to pay for the transition to electric cars, but at some point, they will have priced themselves out of the market, and then what? They will have no less expensive models to sell because they have all been discontinued. The Chinese have lots of those electric cars. The best selling EV in China for a long time recently was the Wuling Mini, which sells for a diminutive $5,000. (The Tesla Model Y is now #1, but a third-gen Wuling Mini is coming to market in 10 days.)

In a perfect world, Adam Smith and his famous “unseen hand” would solve this problem with surgical efficiency. Over a certain number of years, the perfect ratio of size and price would be agreed on by millions of individual actors in the grand theater of economic competition. That would be fine but for one thing: The Earth is being dangerously destabilized by human behavior, primarily the extraction and burning of fossil fuels.

People are using the air and the water and the land as a community toilet, one that is expected to absorb the effluent that results from the unceasing quest for growth ad infinitum. We simply don’t have time for that unseen hand to sort this all out and let the chips fall where they may.

According to Bloomberg, there is already evidence that UK consumers would welcome more smaller, less expensive electric cars. According to a poll published by Transport & Environment earlier this year, an extra 9% of drivers in the UK would buy a small EV if it cost £21,000 and had a range of 250 to 300 kilometers.

A reckoning is coming and it probably does not include most of us driving ever-larger behemoths for all eternity. What the world needs right now are batteries that cost half as much and have twice the energy as the batteries available today. Then and only then will the EV revolution be complete.

 


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