Car makers accused of prioritising expensive electric SUVs for profit over small affordable cars

Automakers have been accused of refusing to bring small, affordable electric cars to market because they want to prioritize expensive battery-powered SUVs, which bring them higher profits.

Manufacturers could sell European-made compact electric vehicles (EVs) for £21,000 and still make a profit, but are instead focusing on large SUVs that are “too big and bulky for British roads” but offer higher margins, says Transport & Environment.

The campaign group criticized carmakers for preventing a large proportion of the country’s drivers from making the transition to electric cars in the “seeking profit”.

The arrival of smaller electric vehicles could “help those on lower incomes reap the benefits of electric vehicle use, as well as more efficient use of critical raw materials essential in efforts to achieve net zero emissions,” he said. the group of ecological experts.

It says a YouGov survey of 502 adults carried out on its behalf last month found that the arrival of more affordable electric vehicles would accelerate the transition to battery cars ahead of a 2030 ban on sales of new petrol and diesel models.

The survey found that a fifth (22 percent) of new car buyers already intend to buy an electric car next year.

However, when given the potential option of a £21,000 small electric car, the proportion of British drivers willing to buy an electric vehicle rose to three in ten (30 per cent).

Not including Citroën’s Ami quad (which costs from £7,695 but has a top speed of 45km/h and a range of just 47 miles), the most affordable EV on the market today is the MG4, starting at £26,995. , and it is a mid-size hatchback. .

The cheapest small electric vehicles currently in showrooms are the Mini Electric and Renault Zoe, both of which cost around £30,000, meaning they are well beyond the budgets of millions of British drivers.

Transport & Environment said carmakers are “prioritizing the production of vehicles that are too big and bulky for Britain’s roads and put increasing pressure on critical and precious materials.” In the photo: a Mercedes EQE and an Audi e-tron

An Audi e-tron and a Jaguar I-Pace, both large electric SUVs, charging on Ionity devices

Ralph Palmer, head of fleet and electric vehicles at T&E UK, said: “Small, affordable electric vehicles will be vital to ensuring all drivers can leave their polluting petrol and diesel cars behind.

“And yet car manufacturers continue to prioritize the production of vehicles that are too big and bulky for British roads and put increasing pressure on critical and precious materials.”

A study by T&E in collaboration with consultancy Syndex estimated that manufacturers could sell small electric cars made in Europe for £21,000 in 2025 and still make a profit.

This is due to falling production costs and battery prices, which would make smaller models “feasible to electrify.”

However, the big six European carmakers (BMW, Mercedes, Renault, Stellantis, Volvo and Volkswagen) have “abandoned small, affordable cars in pursuit of profits that have grown much faster than inflation”, and the biggest profits have been earned from lucrative SUV sales.

T&E singled out Volvo in particular following its decision last month to scrap its current range of passenger cars and estates to exclusively sell SUVs in the UK in the future.

BMW’s £70,000 electric iX (right) dwarfs even its X5 SUV (left), which is a great family off-roader

Mercedes is one of the brands that is being criticized by the group of experts. Pictured: The huge Mercedes EQS SUV, which costs from £130,000

Volvo confirmed last month that it will sell only SUV models in the UK with immediate effect, removing its latest saloons and estates from British showrooms.

Size difference: The BMW i3 (left) was one of the smallest electric vehicles on sale before production ended recently. Here it sits alongside the larger electric SUV models from Mercedes and Audi.

It says more than two in five (44 per cent) of all new electric vehicles sold in the UK in 2022 were SUV models as a result of brands failing to offer a wider range of vehicles to consumers.

That said, only three of the top 10 best-selling electric cars last year were SUVs, and many consider the Tesla Model Y and Kia e-Niro “crossovers.”

However, the think tank warns: “This trend towards larger and heavier vehicles needs to be stopped to reduce emissions inherent in vehicle production and reduce demand on the electricity grid.”

With the government expected to introduce a zero emission vehicle (ZEV) mandate from January, which will require major brands to increase the share of electric vehicles in total annual sales each year, the hope is that it will force manufacturers to offer more affordable vehicles. electric models on the market.

However, T&E wants a weight-based tax to be introduced on the purchase of the heaviest new cars and for local governments to introduce parking charges for these vehicles in urban areas.

This comes a week after Bath and North East Somerset Council last week introduced ULEZ-style parking charges in the historic city, where the most polluting vehicles have to pay more to use council-run car parks.

“There are many options on the table for the government, they just need to be bold and implement them,” Palmer added.

“It’s not a complicated argument: we’re not going to be able to whet the appetite for electric vehicles by offering people expensive e-SUVs, we’re only going to be able to whet the appetite by offering people small, affordable electric vehicles.”

The report came on the eve of a new EU investigation into low-cost Chinese electric cars which are said to be gaining an unfair “competitive advantage” thanks to their cheaper, government-subsidized prices.