Slate Auto Launches Affordable Electric Truck Amid Rising US Auto Costs
Earlier this month, a new Detroit-based electric vehicle startup, Slate Auto, backed by Jeff Bezos, entered the market with a pickup truck priced at $24,950, making it one of the most affordable vehicles in the US. However, as the US grapples with sharply rising auto costs, even this low-priced option may be insufficient to keep pace with the global EV transition, which is increasingly dominated by cheap Chinese cars available for as little as $10,000.
Chinese EVs Gaining Global Market Share
In December, about 20% of new cars sold in the UK were Chinese-made, and 12% of vehicles sold throughout 2023 in the UK were from China. Chinese cars also accounted for roughly 6.4% of European Union sales, despite new tariffs. However, Chinese cars cannot be sold in the US. The US industry faces complications from shifting political ideologies and consumer demand, with American buyers favoring larger, feature-rich vehicles.
Industry Experts Warn of Losing Ground to China
Dan Krassner, executive director of the American EVs Jobs Alliance, a non-profit working to bridge the political divide over EVs, emphasized the stakes: "We can't hand the whole auto industry to Beijing. EVs are the big manufacturing prize of the century, and America has to get back in the race." Slate began accepting preorders last week and could help fill a gap in the domestic market. According to an Edmunds analysis, fewer than 5% of new vehicles in the US sold for $25,000 or less last year, down from nearly 21% in 2019. During the same period, the average new vehicle transaction price jumped about $11,000 to $48,402.
Slate's No-Frills Approach and Pricing
The Slate truck is one of eight new US models available under $25,000. In contrast, China offers more than 200 EVs and hybrids in the same price range, according to industry analyst DCar. The two-seat Slate truck, with an estimated range of 205 miles, is basic: hand-crank windows, no stereo, no speakers, no ambient lighting, a smartphone mount instead of navigation, and standard cruise control. At 14.5 feet, it is shorter than a Toyota Corolla. The $24,950 base price is just the starting point; the company offers 3D-printed accessories, a stereo, a fob, and an add-on to convert it into a five-seat SUV. Customers can also pay extra for vinyl wraps instead of paint. These add-ons quickly increase the price.
Comparisons to Budget Airlines and Skepticism
Jessica Caldwell, executive director of Insights at Edmunds, likened Slate to budget airline Ryanair, offering a cheap ticket but with costly add-ons. She expressed skepticism about the approach in the US market: "I don't think they're going for the stripped-down version because the features, amenities, and technologies – those are part of why prices in the US are so inflated, because Americans wanted all the additions." In contrast, China's BYD offers vehicles loaded with features such as driver assist at around one-third of Slate's price. Its premium models, listing under $15,000, have a range of 314 miles. BYD aims to be the world's biggest automaker within five years and already produces more EVs than Tesla.
Different Consumer Cultures and Market Dynamics
Caldwell noted a vastly different ethos among US and global consumers. Part of the reason the cheap EV revolution may not take hold in the US is that America, the birthplace of the automobile, has a deeply rooted car culture that loves big, powerful, gas-powered vehicles. Emerging markets in China are full of first-time car buyers open to tiny, practical, cheap cars. Europeans are accustomed to smaller vehicles. This creates two very different markets. However, US buyers cannot access BYDs or other $10,000 EVs, and if such cars were available, they might take off.
Optimism for Affordable EVs in the US
Despite the disadvantages, Krassner is optimistic that a pivot toward lower price points could succeed: "The price point is really attractive, and we hope Americans see that it matches their budgets and also shows automakers that there is hunger for cheaper electric vehicles."
