Meet the Electric Vehicle Outselling Tesla in China

By Markets Fool.com

Tesla has shown that electric vehicles may be viable, but the company has only delivered a variant of the traditional automobile.

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Its vehicles are impressive, and as the price point falls they could capture a meaningful percentage of the overall auto market in the United States. What they won't do is change the overall concept of personal transportation. Tesla may be disruptive to the traditional automakers, but it's not disrupting the notion of what a car is.

There are, however, companies doing just that with electric vehicles. To see where the future of the industry may diverge from simply delivering cars powered by electricity rather than gas, you only have to look to China. In that giant market, a new take on the car has shown that a different path for EVs is possible.

Tesla has proven that traditional cars powered by electricity have mainstream potential. The new take becoming popular in China shows that EVs could be even bigger if you're willing to reimagine what a car is.

A look at Tesla's cars. Source: Tesla

It's new, but familiar
In China, two new types of electric vehicles have emerged, reported Harvard Business Review: low-speed electric vehicles and electric utility vehicles. Low-speed EVs will be familiar to Americans as they are "cars" built on the platforms used for golf carts or all-terrain vehicles. They lack the range or hauling capacity of cars, but in some cases they can be more useful than their traditional counterpart.

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Think college campuses and retirement communities -- places where this technology has already been implemented in the U.S. HBR explained some specific cases where these electric golf cart variants would make sense:

For short trips around a development, they are actually more desirable than cars; they don't create tailpipe or noise pollution; they're slow, increasing pedestrian safety; and they're cheap to buy and charge. Range and comfort limitations aren't important factors because they're only used for short trips in good weather. Full-size cars would be overkill for applications like this.

It's not a one-for-one substitute for your car, but these low-speed EVs have evolved. Some now have hard doors and tops. There are also models with heaters and air conditioners. You won't drive one on a highway, but there are street-legal models that can be used to get around town.

This low-speed EV from Chinese manufacturer LUJO (WEIHAI) EV R&D looks like a compact car. Source: LUJO (WEIHAI) EV R&D

It's working in China
In 2013, over 200,000 low-speed EVs were sold in China, according to Autoblog. That's almost four times the total number of vehicles Tesla produced through 2014.

"These sales are overlooked because they take place in small cities, far from the high-profile showrooms of Shanghai and Beijing, but the category is growing rapidly," wrote the car blog. "Low-speed EVs typically sell for half what a comparable combustion-powered car would cost, and because they're not considered 'real' cars, they're exempted from expensive licensing and registration fees."

The EVs, which look more like a low-end compact car than a golf cart, can cost as little as $2,000. Most have four doors (albeit four tiny doors) because Chinese consumers don't see a vehicle as being a true car if it only has two.

The U.S. may embrace this
In China, these vehicles have been embraced because regulation is more lax than it is in the U.S. It's also worth noting that many of the people who buy these low-speed EVs could not afford a traditional car. Instead, they are buying the car-like vehicle as an alternative to mopeds, motorcycles, and other inexpensive modes of transportation.

For this type of vehicle to become disruptive in the U.S., people will need to change how they think about transportation. The areas already using them -- specifically the retirement communities -- are semi-closed communities where the distances traveled are relatively small. Low-speed EVs are, well, low-speed and they have limited battery capacity.

They're only useful in certain situations, but in those areas, they cost much less than a car and offer other advantages. Low-speed EVs might make a logical second family vehicle for in-town errands or be the perfect car for someone with a short commute.

It's not a perfect solution, but it's vastly more affordable than a Tesla. Low-speed EVs could be a major part of our electric auto future.

The article Meet the Electric Vehicle Outselling Tesla in China originally appeared on Fool.com.

Daniel Kline owns shares of Apple. His first car got 10 miles a gallon at most. The Motley Fool recommends Apple and Tesla Motors. The Motley Fool owns shares of Apple and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.