Why doesn’t Ford ax the Fiesta mean the end of superminis? | Rare Techy

According to a recent analysis by the bank Bernstein, the current cost of a battery is such that, if fitted to a supermini to provide an acceptable driving range, it represents on average 60% of the total build cost. However, due to the higher pricing power of cars in the above class, the battery’s share of the construction costs drops to 40%, hiding the costs better.

Obviously, automakers are trying to achieve the same profit margins on EVs as ICE cars, but it’s nearly impossible to pass all of them on to the supermini buyer, Bernstein believes. Discounts make these small cars viable in many European countries, but not in the UK, where all the appeal is aimed at company car drivers who don’t tend to go for superminis. The only supermini to make the EV top 10 in the UK until the end of October was the electric Mini.

That price increase means affordable EV pioneer MG won’t switch to electric power to replace the MG 3, which competes with the Dacia Sandero at the budget end of the market. “Developing a small electric car is only marginally cheaper than developing a larger car,” said UK commercial director Guy Pigounakis. “Then there’s a battery for half the price, so it becomes a £25,000 car, which is not affordable.”

However, electric superminis are planned. VW Group is planning three small electric cars for the Volkswagen brand, followed by Skoda and Cupra variants in 2025, with a target price of under £22,000. All are expected to be produced at the same Spanish plant to increase economies of scale, and are likely to use the cheaper iron-based battery chemistry that has helped MG cut the price of its 4 compact hatchback below £26,000. .

The trick, of course, is to convince the customer to pay more and hope that you cover the extra costs of the batteries. For example, the Spanish-badged version of the small VW Group EV is more of a luxury Cupra previewed by the Urban Rebel than a cheap Seat.

One or more of the trio will likely resemble a small SUV, a gimmick that has paid dividends for automakers over the past six or so years as they tried to raise the price customers are willing to pay for combustion-engined superminis. .