Very small cars are popular in China, can they stay that way?

Can Chinese Product Managers Make Tiny Cars Successful?

Very small cars are popular in China, can they stay that way?
Very small cars are popular in China, can they stay that way?
Image Credit: PakWheels

So I really enjoy driving my car. I get in, fire it up, hear the rumble of that motor (ok, so it’s a 4-cylinder motor – it’s not that much of a rumble), I pull out into the street, press the gas petal to the floor, and I’m off! Well, it turns out that over in China, they love their cars too. However, electric cars are currently all the rage and it turns out that the best-selling electric cars are not what you might think that they would be. In my country, the U.S., the best-selling electric cars are the wonders of modern technology created by Tesla – big cars that have every convenience that you could possibly think of. In China, it’s almost the opposite. The best-selling electric cars have a unique product development definition and are tiny and come with almost nothing. What are these Chinese product managers up to?

Say Hello To The Tiny Chinese Electric Car

In order for this story to make any sense, we all have to agree on one key fact: China is big. Approximately 1.75M micro-EVs (electric vehicles) were sold in China last year. Note that this would look good on anyone’s product manager resume. This is more than twice the number of standard sized electric vehicles. There were roughly 777,000 of those sold. Who is buying these very small electric vehicles? Most of them were sold in a small number of rural provinces (remember that we are talking about China here, so “small” is relative). This market is still in the process of expanding rapidly – there are over 400 different companies competing with each other for a share of this market.

So what’s going on in China? How have the EV car manufacture’s product managers made their cars so popular? Well, the Chinese government has helped them out. The government has provided subsidies to the Chinese EV manufactures. However, the result of the popularity of these types of cars which are both slow, cheap, and contain very little technology is not what the Chinese government had planned. The result of this situation is that many Chinese cities have banned the vehicles. What they would prefer people to do is to purchase the standard full-size electric vehicles.

So what’s wrong with these cars besides the fact that they are very small? It turns out that they come with two main problems. The first is that they use cheap lead-acid batteries which in the end are bad for the environment. The second problem that they have is that they have basically no crash protection. So what can be done about this situation? The Chinese government is starting to take steps to legitimize higher-quality low-speed electric vehicles and banning inferior ones. The top speed of these vehicles is defined to be 25-43 miles per hour

Challenges For The Tiny Chinese Electric Car

The Chinese product managers know their customers and have designed their tiny EV cars to meet their needs. These cars cost less than US$1,000 and do not have any kind of crash protection. The product managers believe that safety is relative. They believe that their tiny EV cars are safer than the alternative – scooters. Additionally, in the winter it can be a lot colder to ride on a scooter. Something else that makes the tiny EV cars popular is that you do not need a driver’s license to operate one.

What makes operating a small electric car in China unusual is that the cars occupy a legal gray area between cars and scooters. What this means is that these cars are able to use both roads and bicycle paths as a way to make it through traffic. The arrival of tiny EV cars has created a problem for the Chinese government. They would like to be able to enforce vehicle standards; however, at the same time they don’t want to price regular people out of the China electric car revolution.

The future looks bright for these types of cars. They provide a lot of benefits for the people who own them. In the big cities in China, there is a demand for these cars. Micro-EVs are very easy to park – you can actually fit three of them into one standard parking space. Additionally, these cars can be used to zip through crowded big city traffic. The micro-EV product managers hope that the Chinese government will use light-touch regulation to make the micro-EV sector better than it is today.

What All Of This Means For You

China is a massive country with a lot of people. Those people have a need to be able to get from one place to another just like everyone else. The Chinese government has been promoting the arrival of electric cars as a way to prepare the country for the future. However, what has happened is that a new market has been created: tiny micro-EVs.

In China, more people are buying the very small micro-EVs than are buying traditional sized electric vehicles. People in the rural areas of China are buying these cars and they are being supplied by the over 400 different companies that are making them. The reason that these cars have become so popular is because the Chinese government has been providing electric car subsidies and this has made it even easier to purchase these cars which are both slow and cheap. The problem with these types of cars is that they use lead-acid batteries and they have no collision protection. Product managers say that these cars are better for people than riding on scooters. Micro-EV cars live in a gray area between scooters and cars. People in cities like them because they make it easy to get around.

China is such a large market and the micro-EV cars have been such a hit, I don’t think that they will be going away any time soon. I suspect that the Chinese government is going to have to step in and establish some baseline requirements for these types of cars in order to keep their citizens safe. Chinese product managers are going to have to take a look at their product manager resume and find ways to keep their eyes open, work with the new regulations, and make sure that they can still offer cheap cars that will meet the needs of millions of customers!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that the Chinese government should require micro-EV cars to use lithium batteries instead of lead-acid batteries?

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What We’ll Be Talking About Next Time

Ok, so there really is no pride here: I’ve been fired. Not only have I been fired, but it turns out that I’ve been fired a lot. Like a total of seven times. Now, in my own defense I’ve worked for 14 different companies, but seven is still a very big number. I must confess that I really don’t quite know why I’ve been fired so much. As my sister has told me, you know there is one thing in common about all of the jobs that you’ve been fired from – you! I’m a nice guy. I don’t drink, do drugs, I show up for work on time and work the whole day, I get along with people, etc. And yet I still seem to keep getting fired. The good news for you from the flaming car wreck that is my career is that I’ve learned a lot about how to avoid getting fired (don’t do what I did). Let’s talk about what you need to do as product manager in order to hold on to your job.

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