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New Long-Range, Affordable Electric Cars Coming Soon

Consumer Reports logo Consumer Reports 1/4/2019 Keith Barry
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Tesla has not yet announced when its promised $35,000 Model 3 will be available for sale, but you’re in luck if you’re looking for a lower-priced electric vehicle. Soon, you’ll be able to choose from a host of similarly priced new EVs that can get more than 200 miles on a single charge.

“In the next year, there are quite a lot of models in that sub-$35,000 range,” says Shannon Baker-Branstetter, CR’s senior policy counsel for energy and environment. “That is definitely in the range that a lot of new car buyers are looking at.” 

Until now, buyers have had two types of EV choices: a number of high-end, long-range EVs, including the Tesla Model S or the Jaguar I-Pace, or some affordable ones, such as the Fiat 500e or Mitsubishi i-Miev, that suffered from short ranges and a lack of amenities.

Only the Chevrolet Bolt, which has a 238-mile range and starts at $36,620, came close to splitting the difference.

Now, experts tell CR, the latest crop will deliver 200-plus-mile ranges on a single charge, and offer popular SUV-like designs and welcome creature comforts. 

Hyundai and Kia have announced EVs that are expected to start around $35,000 when they go on sale later this year. Tesla has said that its $35,000 version of the Model 3 could arrive in the first half of this year.

Still, to find the best deals, you’ll need to be aware of expiring tax incentives and potential limited availability for the new electric vehicles.

a car parked on the side of a building© Provided by Consumers Union of United States, Inc.

Details on the New EVs

2019 Hyundai Kona EV: The automaker says this all-electric version of the Kona crossover will get up to 258 miles on a single charge. It will go on sale early this year at a starting price of $36,450—or $28,950 after the $7,500 federal tax credit is applied. CR recommends the gasoline version of the Kona (we haven’t yet tested the EV version), praising its nimble handling, easy-to-use controls, and standard safety features.

2019 Kia Niro EV: There are already hybrid and plug-in hybrid versions of the Niro. The EV version is coming this spring, has a reported range of 239 miles, and should start at around $38,000 before tax credits and incentives, according to Mel Yu, CR’s automotive analyst.

2020 Kia Soul EV: The redesigned Soul EV (shown at top) uses the same underlying hardware as the Kona and Niro EVs. It’s undergoing range testing  but is expected to get around 230 miles per charge—more than double the 110-mile range of the current Soul EV. It is likely to be priced similarly to the Niro, Yu says.

Longer-range Nissan Leaf: Debuting at the 2019 Consumer Electronics Show, this updated version of Nissan’s popular EV is expected to have a range of more than 200 miles, which makes the Leaf more competitive with the likes of the Chevrolet Bolt , Hyundai Kona EV, and Tesla Model 3.

Tesla Model 3 (short range): Tesla first promised a $35,000 shorter-range Model 3 sedan in 2016, but it is not yet available. When asked about future availability, a Tesla spokesperson referred CR to the company’s Q3 earnings call, in which CEO Elon Musk said that building a $35,000 Model 3 would probably be possible in less than six months. Currently, buyers can opt for a midrange Model 3 with a 264-mile range and a starting price of $44,000 before tax credits. The short-range Model 3 would have about a 220-mile range, according to the automaker.

The EV Market Is Growing

These new cars are entering a market that’s expected to grow rapidly. Research and analytics firm IHS-Markit estimates that the share of EVs sold in the U.S. will increase to 6 percent of the market in 2025, up from about 1 percent today, driven largely by a global regulatory environment that favors electrification.

Sam Abuelsamid, senior analyst at automotive research and consulting firm Navigant, told CR that the Niro and Kona EVs are especially well-positioned to attract buyers who are on the fence about going electric.

“Both of those vehicles are in the subcompact to compact crossover segment, which is where the real market growth is right now,” he says. “Everybody is moving towards those types of smaller crossovers, and they’re launching their EVs in that space.”

Kia spokesman Neil Dunlop tells CR that the automaker is staying true to its roots as a mainstream brand by aiming the Niro EV and Soul EV at a mass market.

“We sense demand for EVs throughout the buyer spectrum—from premium/luxury through mainstream market sectors,” he says. “Kia, as a mainstream brand, is targeting a mainstream audience by offering two utility-oriented EVs in affordable price ranges.” 

Watch Out for Expiring Tax Credits

When buying an electric car or a plug-in hybrid, you can currently get a federal tax credit of up to $7,500 as long as the manufacturer hasn’t sold more than 200,000 qualifying vehicles.

Once an automaker reaches that threshold, the credit begins to phase out. The full tax credit remains for the remainder of the quarter in which the automaker meets the threshold and for the quarter after that.

The credit is then cut in half for the next two quarters. Then it’s halved again for two more quarters. A year after reaching the threshold, the automaker’s vehicles are no longer eligible for any credit.

For instance, because Tesla already sold 200,000 cars by June 30, 2018, all Teslas delivered between Jan. 1 and June 30, 2019, are eligible for a reduced credit of $3,750. The credit drops to $1,875 on July 1, 2019, and expires completely for vehicles delivered on or after Jan. 1, 2020. GM confirmed that it reached the 200,000-vehicle threshold in the fourth quarter of 2018, so the tax credit will begin to phase out this year for the Bolt as well.

The federal tax credit is important because it keeps affordable EVs competitive with gasoline-powered vehicles, Baker-Branstetter says. “There is still a slight premium for those vehicles compared to their gas-powered competition,” she says. 

The Impact of Incentives

When the Georgia Legislature ended a $5,000 tax credit for EVs in 2015, sales dropped from roughly 1,400 per month to fewer than 100 the month after the tax credit ended. Note that several states, including California and Colorado, continue to offer state rebates, tax credits, or other incentives for EV purchases.

To keep mainstream EVs affordable, automakers might have to make up the difference for expiring credits, Abuelsamid says. “Eventually, every OEM will have to drop prices as their eligibility for tax incentives expires,” he says. “Ultimately, they will have to drop prices if EVs are going to be cost-competitive with ICE [internal-combustion-engine] vehicles and start to gain real market share.”

Tesla already dropped prices from $1,000 to $2,000 on many of its new vehicles after its credit began its phaseout, and Abuelsamid says he “would expect a price drop on the Bolt soon in order to be more competitive with the new mainstream models.”

Possible Limited Availability Nationwide

This latest crop of affordable EVs are ready to go toe-to-toe against gasoline-powered vehicles, says Chelsea Sexton, an industry analyst and EV advocate. For example, the Kona EV, Soul EV, and Niro EV are based on vehicles that are already widely sold, and they boast ranges that are “certainly enough for many people, especially in multicar households,” she says.

Like Abuelsamid, she thinks that vehicles from Hyundai and Kia will attract new buyers who might not have previously considered going electric. The Hyundai Kona, for example, “has some of the Tesla-ish kind of stuff or I-Pace kind of specs going on, but for less money than I’d have to pay for one of the premium brands,” she says.

However, Kia and Hyundai are both expected to sell those new EVs in only a limited number of states—including California and other states that follow the California Air Resources Board’s ZEV (zero-emissions vehicle) mandate, a move that Baker-Branstetter says is shortsighted.

For example, Kia says that the Niro EV will be sold only in California, Connecticut, Georgia, Hawaii, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Texas, and Washington. The Soul EV and Kona EV will have similarly limited distribution.

“It is a limiting strategy to only stick to those states,” Baker-Branstetter says. “Certainly there are people in other states who would be interested in the vehicle.”

Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2019, Consumer Reports, Inc.

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