Why the EV-dominated microcar sector is poised to boom

The decline of the minicar in Europe combined with a miniscule number of small cars on the market that cost less than €15,000 (about $16,500) has given new life to the microcar segment.

The Renault Twizy had the niche to itself for years, providing an affordable, four-wheel, battery-driven vehicle primarily to young city dwellers.

Stellantis’ family of brands now offers three electric-powered microcars: the Citroen Ami, Opel Rocks-e and Fiat Topolino. The models have a top speed limited to 45 kph (28 mph) and the minimum driving age is 14 years old in many countries.

To keep pace with demand, Stellantis is investing in its plant in Kenitra, Morocco, to double production of the microcars.

The Ami, first launched in 2020, and the Rocks-e have been a success for Stellantis. Production of the Citroen and Opel variants totaled about 20,000 units in 2022, with the addition of the Topolino expected to increase output to 35,000 to 40,000 units this year, supplier sources have told Automotive News Europe.

Renault's response comes this year with the arrival of the Duo from its mobility services unit, Mobilize. The Duo promises improved range, more comfort and optional higher maximum speeds than the Twizy. Renault says it can build up to 17,000 Duos a year at its factory in Tanger, Morocco.

These moves have not gone unnoticed as the global microcar segment is anticipated to be worth $100 billion by 2030, according to a recent report by McKinsey.

Microcars provide a new entry-vehicle option given that Europe’s minicar segment has been abandoned by brands such as Ford, Volkswagen and Opel. As a result, minicars now account for just 4.2 percent of all sales in the region, down from more than 10 percent in 2010, creating an opening for microcars, which are currently priced below €12,000 (see table, below, right).

Major European brands are not the only ones interested in the niche. Israeli-based EV startup City Transformer is taking pre-orders for the CT-1, a €16,000, shape-changing two-seater that has a top speed of 90 kph (55 mph).

City Transformer says the microcar can expand its width while driving and then shrink to a 1-meter-wide (3.3-foot-wide) wheelbase (from 1.4 meters) for better maneuverability at lower speeds and when parking.

Agility is important, but even more crucial is affordability.

"Most EVs are still priced beyond many people's budgets," Gartner analyst Pedro Pacheo said.

Not just for teenagers

City Transformer Chief Operating Officer and co-founder Udi Meridor believes the timing is right for microcars because many municipalities have concluded that they need a way to reduce congestion while encouraging more sustainable transport options that reduce emissions.

"From our pre-orders, it's mainly the 40- to 65-year-old consumer,” he said, adding that most of them are on the outskirts of the city center. "They usually own a vehicle and see it [the City Transformer] either as a second vehicle or as the preferred way of transportation during the week."

Meridor said the company is targeting Germany, the U.K., France, Italy and the Netherlands to start, with the aim to start customer deliveries in 2025.

"We are looking to start with a couple thousand of vehicles delivered," he said. "We see a total mass production potential of 50,000 to 75,000 vehicles a year."

He added that the EV transition will stumble if larger, heavier, resource-intensive, battery-powered vehicles replace those with combustion engines.

"A Tesla battery weighs as much as a City Transformer, plus the battery, plus two passenger and their suitcases,” Meridor said. “City centers need smaller vehicles."

Safety question

The big question about the small cars is: Are they safe?

"The safety issue is definitely one of the obstacles toward mass adoption," Gartner’s Pacheco said.

Alain Doucet, managing director of Citroen's production facility for the Ami, said microcars are not allowed on expressways and their top speeds are kept low, which results in a safer environment for the occupants.

"When compared with a moped or a scooter, the Ami is safer than those options. This comes into consideration when families discuss buying one for their children," he said. "There is a three-point seat belt, where the regulations only call for a one-point belt, the cars have a tubular-cage structure as well as 360 degree visibility, which makes it easy to see all around you."

Doucet said the target market for the Ami is in fact young people without a driver's license--and notes the market for these vehicles is already well-established in France.

"Of the 40,000 microcars, France is home to more than 20,000 of them," he said. "When we launched the Ami in 2020 the aim was to refresh the microcar to reach the younger generation. They want mobility, they want independence; 77 percent of our customers are families with two teenagers."

Demand is France continues to be strong. On June 20, customers in France bought 300 of the 800 units of the Citroen My Ami Buggy available for sale online that day. The entire allotment of cars was sold out in 10 hours.

With the Ami, Rocks-E, and Topolino, as well as derivatives such as the My Ami Buggy and the open-top Topolino Dolcevita, Doucet foresees a bright future for microcars.

"It's just the beginning of this story, as now we have a lot of competitors coming into the market," he said. "The market is growing, especially for those with a limited budget."