Why the World Is Ignoring Micro EVs

Out of the $800 billion global EV market, micro electric vehicles captured just $11 billion last year. These compact cars—under 2.5 meters long and capped at 100 km/h—represent barely 1.4% of global electric vehicle sales, with 1.4 million units sold worldwide.

The numbers tell a stark story about an industry segment that seems perfectly positioned for urban mobility yet struggles to find its audience.

The Middle Ground Problem

Micro EVs face what industry experts call the "uncomfortable middle ground" dilemma. Budget-conscious buyers choose scooters for cheap transport, while comfort-seekers opt for SUVs with longer range and family features. Micro EVs fall through the gap.

"Electric two-wheeler buyers are often those who are in quest of the cheapest possible riding, and such riders usually have short trips, while the customers purchasing bigger electric cars mostly look for longer range, more comfort, and family-friendly features," explains William Fletcher, CEO of automotive marketplace Car.co.uk. "Micro EV owners are in the middle of the spectrum longing for a completely enclosed safe vehicle for city commuting without the cost and space requirements of a full-sized EV."

Of the 785 electric car models available worldwide in 2024, only about 78 were micro EVs—including quadricycles and modular trucks and vans.

China's Success Story Has Limits

The one genuine bright spot comes from China, where the Wuling Mini EV briefly overtook the Tesla Model Y in October to become the world's bestselling EV that month. It sold almost 350,000 units between October and January.

But even this success may be temporary. Rising incomes and an aging population are pushing Chinese consumers toward larger SUVs, according to Pranav Jaiswal, a technology analyst at IDTechEx. "This is a result of changing demographic dynamics within the country," he notes.

India mirrors this pattern. The country's bestselling EV is MG's premium Windsor SUV, not the compact Comet launched in mid-2023. After several price hikes, the Comet sells about 1,000 units monthly—a quarter of the Windsor's sales.

Why Automakers Keep Trying

Despite sluggish sales, carmakers continue launching new models. VinFast and Hero Motocorp planned micro EV launches in India; Honda teased one at a Japanese auto show; Toyota unveiled a model with a solar roof; and Hyundai's Inster expanded beyond South Korea to Europe and the Middle East.

Even Tesla, which mainly produced Model Y SUVs and Model 3 sedans last year, is betting on smaller cars with its two-seater CyberCab, set to start production in April. The company is positioning it as commercial robotaxis rather than consumer vehicles, sidestepping the buyer problem entirely.

"We would expect over time to make far more CyberCabs than all of our other vehicles combined," CEO Elon Musk said during the company's January 28 earnings call.

The Economics Make Sense for Some

For established automakers, the math is different than for startups. Micro EVs are cheaper to produce because of smaller batteries and face looser regulations, making development less resource-intensive. The vehicles also help carmakers meet emissions targets and allow experimentation with simpler platforms.

"Even when sales are modest, the learning is valuable," Rob Delisa, who runs car-leasing site CarLeaseTips.com, told Rest of World. "Automakers view micro EVs as a different sales channel altogether—targeted toward urban rental and fleet use rather than traditional dealership buyers."

Small companies focused solely on micro EVs face steeper challenges. Hiriko, a folding micro-car concept born at MIT and developed in Europe, never moved beyond a single prototype and collapsed amid fraud. Micro Mobility Systems, the Swiss company that has produced 5,500 of its front-opening two-seater Microlino, is struggling to get the vehicles classified for carbon credits and is now courting Chinese partners with incentives of up to $50 million on offer.

Pockets of Promise

Some markets show genuine interest. Japan's $7,000Mibot single-seater car surpassed Toyota's EV sales in 2024 by securing 3,300 preorders, while France allows some micro-car models to be driven by teenagers as young as 14.

These examples suggest the potential lies not in replacing traditional cars but in serving specific niches—urban fleets, teenage drivers, or ultra-budget conscious consumers in dense cities.