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Tiny Cars, Big Opportunity

Tiny Cars, Big Opportunity

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Electric minicars are taking off globally, driven by advances in battery tech and growing climate concerns. Could they become the next big thing in the US?

Unless your interest in transportation borders on obsession, you probably don’t. But now might be a good time to learn, because there’s a new generation of electric vehicles emerging in cities around the world: small, weather-protected urban runabouts that fall along the wide spectrum between two-wheeled EVs and traditional cars. These conveyances are already widespread in East Asia, and they’re gaining popularity in Europe as well. North America could be next.

If so, the invasion should be welcomed. The reduced size and efficient charging of minicars could address two of the most pressing transportation challenges in the US: reducing road deaths and cutting greenhouse gas emissions. Available in a motley assortment of shapes and sizes, these miniature mobility devices could help untether the United States from its destructive, expensive and entrenched addiction to automobiles.


Arcimoto Three-Wheeled Electric Vehicle Facility Ahead Of Markit Manufacturing FiguresAn electricFun Utility Vehicle” from Arcimoto in Eugene, Oregon, in 2021.  Photographer: Alisha Jucevic/Bloomberg

But that won’t happen unless cities can provide places to operate them, as well as clarity about their legality. For minicars to deliver on their promise, US policies — at the federal, state and local levels alikewill need to grow up.

An Incomplete Taxonomy of Very Tiny Cars

Of the many questions swirling around minicars, one of the most basic is how to define them. New designs seem to arrive on a monthly basis. (A recent example: The Israeli City Transformer, a two-seater that can widen and narrow its wheel axle depending on available roadway space.)

Despite myriad variations, the current crop of minicars share a few essential characteristics: They’re electric, with batteries that can be charged in a standard electrical outlet (no need for the special chargers used for some electric cars). They’re significantly smaller and lighter than traditional automobiles, and most are slower. Some are capped at 20 miles per hour; a few can hit 70. But they are more stable and substantial than battery-powered bikes, scooters or mopeds, with three or four wheels and usually some kind of shell to protect occupants from weather. Last but not least, minicars generally cost somewhere between $4,000 and $20,000 — well below the price of a new car, but more than e-scooters and e-bikes.


Ex-Servicemen Drive Bubble CarsA pair of postwar “bubble cars” in 1959. Photographer: Hulton Deutsch/Corbis Historical via Getty Images

Microcars date back to the dawn of the automobile age. Gas-powered versions found widespread adoption in the years after World War II, when fuel shortages brought a wave of tiny, thrifty machinery to war-ravaged cities. Most of Europe’s microcars faded away in the 1960s, but the segment endured in Asia. In Japan, lightweight “kei cars” are fixtures of the nation’s crowded cities. Electrification has given them a new jolt of energy: Minicars now represent around 40% of Japanese automobile sales. 

In China, a government-sanctioned class of “ low-speed electric vehicles” are limited to a width of 1.5 meters (5 feet) and a top speed of 70 kilometers per hour (44 mph). Some six million have been sold; the Wuling Mini EV, costing around $5,000, has become the most popular electric vehicle in the country.

Although these Asian minicars are rarely exported, comparable models have emerged in Europe. The Swiss Microlino, for instance, has a design that hearkens back to postwar “bubble cars” and can reach 56 mph; the new Citroën Ami is a low-speed two-seater that is now turning heads in Paris. Even smaller “moped cars” like the Biro and the Canta — tiny enough to share bike lanes and park on sidewalks — are also available to European buyers, with speeds typically capped at 28 mph.


GERMANY-AUTOMOBILE-IAA-SHOWA modern Microlino at the International Motor Show in Munich in 2021. Photo by Tobias Schwatz/AFP via Getty Images

These kinds of zippy four-wheeled conveyances remain rare in the US (though Citroën has said it wants to bring the Ami across the Atlantic). More common are comparatively plodding golf carts, which are well-established as local transportation within American retirement areas like The Villages, Florida, and in coastal communities like Bald Head Island, North Carolina and Catalina Island, California. Typically capped at 20 mph, golf carts are increasingly popping up on the roads of warm-weather cities such as Tampa, Florida, and Scottsdale, Arizona.

Closer to the bicycle end of the spectrum are pedal-equipped hybrids like the ELF, the PodRide, the Veemo and the CityQ — enclosed trikes and quadricycles with battery assist. With their pedals and slow speeds, these machines more closely resemble e-bikes and e-cargo bikes — and are often classified as such.

The legality of operating these vehicles on US streets varies widely. The federal National Highway Traffic Safety Administration pretty much ignores golf carts, but it does have a classification of “Low-Speed Vehicles” for four-wheelers that max out at 25 mph. Such LSVs must conform to a set of design rules regarding features like seat belts, signal lights, mirrors and parking brakes. Most states require registration, insurance and a driver’s license to legally operate them.


Paris Motor ShowGEM e4 electric carts at the 2010 Paris Motor Show. Photographer: Antoine Antonio/Bloomberg

Among the most common LSV models is the GEM, built and sold by Waev, a company that recently spun out of Polaris. With prices starting a bit over $13,000, GEMs are common on university and corporate campuses, and sometimes used by microtransit providers. Paul Vitrano, Waev’s chief policy officer, said that the company plans to give the vehicle a design overhaul with an eye toward selling directly to consumers. The GEM recently gained a new competitor in the Wink, a car-like LSV costing $9,000 to $12,000 that can be outfitted with a solar panel affixed to its roof.

Rounding out our minicar tour are higher-powered autocycles, or pods, which are three-wheelers typically regulated as motorcycles. These can travel significantly faster than LSVs or golf carts. Arcimoto’s “Fun Utility Vehicle,” for instance, goes for around $18,000 and has a top speed of 75 mph. Nimbus, another autocycle maker, has designed a three-wheeled model that leans as it turns, like a motorcycle. Lihang Nong, Nimbus’s founder and CEO, said the company will start shipping vehicles at the end of next year, charging just under $10,000. Based on preorders, Nong observed the strongest interest in big cities like San Francisco, Los Angeles and New York City. (Disclosure: I am an advisor to Nimbus.)

As diverse as minicars are, they share a few defining advantages when compared to automobiles. Although their small size and slow speeds make them ill-suited for long-distance trips, their maneuverability provides unique advantages for short urban ones — and fully 60% of journeys in the US are under six miles. “You can park perpendicular to parallel parking spots,” said Nong. “That saves a lot of time searching for parking.”


Jiayuan  EV Electric Car Vehicle In WarsawA Chinese-made Jiayuan e-Apple electric car in Warsaw, PolandPhoto by STR/NurPhoto via Getty Images

Notably, all but the most luxurious minicars cost a fraction as much as the average new car, which recently hit $48,000 for the first time in the US. Higher interest rates make car ownership even pricier; earlier this year, the average monthly payment broke $700, a new record.

Minicars’ combination of affordability and urban convenience could appeal to families questioning the cost and hassle of a second or third automobile. Especially as car ownership has grown more expensive, minicars pose a disruptive threat to traditional carmakers that have shifted toward ever-larger SUVs and trucks. (Ford no longer sells any sedans at all in the US.)

The rise of minicars could be a nightmare for big auto companies. But for everyone else — especially those living in urban areas — it could well be a dream.

The Big Promise

Why do minicars offer so much societal upside? Let’s walk through the reasons.

To start, they pose far less danger than automobiles to pedestrians and cyclists, whose deaths have been soaring in the US. It’s easy to understand why: If forced to choose, you’d rather be hit by a 1,000-pound golf cart puttering along at 20 mph than a 6,500-pound Chevrolet Silverado going 50.

Minicars are better for the planet, too, devouring much less energy and resources for propulsion and manufacture. Their batteries are a fraction of those underpinning electric SUVs and trucks. A Hummer EV’s battery weighs around 3,000 pounds, roughly 30 times the size of Nimbus’s battery pack. Smaller batteries require less lithium, cobalt and nickel — essential minerals whose shortages have hobbled electric vehicle manufacturing. Even a modest shift toward miniature EVs would free up precious material, catalyzing the transition from fossil fuels.

Minicars also expand mobility access, in two ways. Most obviously, their lower prices put them within reach of those who struggle to afford a full-sized car. But slower minicars, such as golf carts, offer another key advantage. Because most operators don’t need to pedal (or, in some states, possess a driver’s license), they offer mobility to those physically unable to drive a car or ride a bike. That’s an especially valuable capability in a country with soaring numbers of older people.


NETHERLANDS-TRANSPORTA Canta microcar in Amsterdam. Unlike larger minicars, these can be driven on cycle paths and sidewalks, and are often used by elderly or disabled driversPhotographer: Sebastien Bozon/AFP via Getty Images

But the benefits of minicars will remain untapped unless they can be used legally and safely across various jurisdictions.

Certain subcategories have little problem clearing that hurdle in the US. Autocycles, for instance, are generally treated as motorcycles, a mobility mode with well-established rules. Low-Speed Vehicles, too, have reasonably clear regulations, thanks to NHTSA’s definitions. States’ requirements for owning and operating LSVs are fairly consistent: They must be registered and insured, and operators must have a driver’s license. Registered LSVs are generally legal on US public roads with speed limits of 35 mph or below.

Vitrano, the Waev executive, sees fast roadways as one of the biggest limitations on LSV adoption. “I would ask policymakers for lower speed limits,” he said. “That’s what unlocks the power of LSVs.”

Bigger, faster vehicles like kei cars fall into more of a regulatory limbo, for multiple reasons. Older gas-powered models from Japan can be found in US cities, driven by enthusiasts willing to navigate importation regulations. But since federal law restricts importing automobiles under 25 years old that don’t comply with US vehicle standards, modern EV versions are off-limits.


JAPAN-AUTO-SOCIETYHonda N-Box microvans at a dealership in Tokyo in 2017.  Photographer: Kazuhiro Nogi/AFP via Getty Images

Another hurdle is NHTSA’s recognition of only two categories for cars: traditional automobiles and LSVs that travel below 25 mph. That’s an awkward fit for models like the Microlino that can go faster than 25 mph; to be street legal, they must comply with the same safety standards and crash tests as passenger vehicles five times heavier. That can require expensive reconfigurations (as well as the importation of a few extra vehicles to be destroyed in NHTSA’s mandatory crash tests). “Some of these vehicles can be brought up to comply,” said Paul Steier, the director of vehicle programs at the American Association of Motor Vehicle Administrators, “but it depends how much money you want to put into them.”

Countries in Europe and Asia have mitigated such challenges by establishing legal categories of small cars that travel between 25 and 60 mph. But NHTSA has shown little interest in following suit: In 2008 the agency denied a petition to create a new class of “medium-speed vehicles” faster than 25 mph.

How to Make Room for Minicars

As the slowest minicars, golf carts are a bit of a special case, because the federal government has nothing to say about them. That leaves regulation entirely up to cities and states that are often comparatively lax about applying standards. “Typically, golf carts require permits but not a state license plate,” said Steier.

One place that welcomes them is Peachtree City, Georgia, a town of 40,000 located 30 miles outside Atlanta. Mayor Kim Learnard says the town has registered some 10,000 golf carts among its 13,000 households. The town adopted a set of rules specific to golf carts, including banning children under 12 from operating them. Their popularity stems largely from the 100 miles of multi-use paths that make most of the town accessible.

Few places in the United States possess such an extensive car-free network — but they may not need one in order to accommodate minicars. After all, as Waev’s Vitrano noted, simply lowering speed limits (ideally with road diets that slow down drivers) can make existing roadways safe and comfortable for minicar users.

Kevin Krizek, a professor of environmental design at the University of Colorado, emphasized another option: reallocating street space away from faster, heavier automobiles. “Cars currently consume the vast majority of urban street space,” said Krizek. “For three-quarters of those streets, it’s possible to reverse that hierarchy” — i.e., transfer a majority of pavement area to those walking, biking or using a minicar (potentially in adjacent but separated street spaces, with full-sized cars restricted to their own, reduced lanes). In Southern California, the South Bay Cities Council of Governments has explicitly incorporated minicars into its plans for a Local Travel Network, along with bikes and scooters.

Public officials have one other blunt instrument available to encourage minicars: They can subsidize them. Denver’s recent success with e-bike rebates could serve as a model. The city’s offer of up to $1,700 off a new bike has proved so popular that overwhelmed officials had to pause the program until next year. But despite their advantages, few US jurisdictions have encouraged the adoption of pocket-sized EVs. A handful of states like Oregon and California make autocycles eligible for EV rebates, but LSVs and golf carts seem to fly under the radar entirely, and Illinois explicitly excludes LSVs from its electric vehicle subsidy program.

Federal officials haven’t shown much interest either. Congress had a golden opportunity to incentivize minicars with the Inflation Reduction Act earlier this year, but the final version of the bill offered $7,500 toward buying an electric car — and nothing for a smaller EV or e-bike.

Beyond their benefits to road safety, climate and mobility access, minicars offer one other potential upside, something harder to quantify but exciting nonetheless: They might make people friendlier.

I’m not kidding. The late urban theorist Donald Appleyard documented how people living in car-dominated places have fewer relationships with those residing nearby. The slower speeds of minicars could help rebuild neighborly ties that automobiles have eroded. Peachtree City’s mayor told me that her town’s ubiquitous golf carts compel more people to stop and chat with one another while navigating their way through the town.

You might say that minicars present a vision that stands in direct opposition to gigantic SUVs like the 18-foot long, six-and-a-half-foot tall Cadillac Escalade: Instead of trying to overwhelm with size and aggression, minicars make a compelling case that less can actually be more.

—Lucas Peilert contributed research assistance for this article. David Zipper writes for Bloomberg.

Source: Bloomberg

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