Social media buzzed with reactions when startup Slate Auto unveiled its electric pickup truck priced at approximately $25,000 last month. The vehicle’s simplistic design features a silent body and nostalgic hand crank windows.
How wild is it? According to Cox Automotive, average monthly payments for new vehicles surged to $739 in March, up from $537 in January 2019. The average cost of a new car is now $47,400, while electric models are around $59,200. The high interest rate, currently about 9.4% on a 72-month loan, has further strained finances for buyers.
“Prices and interest rates are exceptionally high,” stated Mark Schirmer, director of industry insights at Cox Automotive. “For consumers who haven’t been in the market since 2018, the cost of a vehicle might seem shocking.”
President Trump’s 25% tariffs on imported automobiles and parts have prompted consumers to buy now, fearing further price increases. Cars priced below $30,000 are particularly vulnerable, with nearly 80% facing these tariffs. This includes popular models like the American-made Honda Civic and Toyota Corolla. The supply of budget-friendly models is expected to dwindle as automakers may cease the importation of certain vehicles entirely.
Enter Slate, a suburban Detroit startup backed by venture capital and Amazon founder Jeff Bezos.
Former Fiat executive Chris Berman, now CEO of Slate, mentioned that their trucks won’t be available until late 2026 but are intentionally designed to alleviate sticker shock.
True to its name, the truck serves as a blank canvas, enabling buyers to customize with over 100 accessories, such as power windows and heated seats, as their budgets allow or needs evolve. While it lacks built-in stereo or touchscreen display, it features a dock for phones and tablets, which saves costs and helps avoid the digital obsolescence often seen in car entertainment systems.
“I believe hardworking Americans are seeking value for their money,” Berman expressed in a recent interview.
This message resonated with 41-year-old Liv Leigh, who secured a slate truck reservation during its public debut at Long Beach Airport in California last April, paying $50 to do so.
She observed Slate employees convert the two-seat pickup into a five-seater SUV in just about an hour. Lee values the compact size of the truck, which is smaller than a Civic, along with its moderate 150-mile range.
“I love the concept of a utilitarian truck, a basic model that can handle dogs, muddy bikes, and plywood easily,” Lee remarked. “We don’t need a massive vehicle for our needs.”
Berman emphasized that efficient design and manufacturing are critical to maintaining the low price of their trucks. The grey plastic composite body panels eliminate the necessity for costly steel body stamping facilities or paint shops.
Just as the Ford Model T was available only in black, the Slate grants buyers a choice of 13 colors of vinyl body wraps for an additional $500. Customers can also opt for larger factory-installed batteries that extend the range to 240 miles.
“This approach keeps costs down while offering customers the freedom of choice,” said Berman. “They can customize their vehicles as per their preferences rather than adhering to manufacturer standards.”
Slate anticipates that its US-based supply chain, including batteries produced by South Korea’s SK On, will qualify for a $7,500 federal tax credit. However, some Republican lawmakers recently introduced a budget bill that removes this incentive and dismantles other Biden-era climate and energy policies.
Success hinges on Slate’s ability to navigate the treacherous landscape of electric vehicle startups, as several young manufacturers like Fisker, Nikola, and Canoo have sought bankruptcy protection.
Regardless of subsidies, Berman remains optimistic about Slate’s business strategy.
The company aims to price the truck around $20,000 before any government incentives, hoping to become a contender against the Nissan Leaf, which is the most affordable electric vehicle at $29,300 but no longer qualifies for tax credits. Chevrolet is set to release a redesigned Bolt SUV for roughly $30,000 by year-end, which will qualify for a tax credit, reducing its effective price to about $22,500.
Erin Keating, executive analyst at Cox Automotive, has praised the slate truck’s originality. However, she noted that the two-seat pickup’s short range and minimalistic interiors might not attract American buyers accustomed to high-tech features and comforts.
“There’s no harm in attempting to resolve the affordability crisis, but I question whether this will become a high-volume seller,” Keating commented. “Ultimately, this is a compact EV that offers very little. It doesn’t improve the array of affordable options with longer ranges.”
The Ford Maverick poses a potential challenge to the Slate, as its compact pickup is two feet longer, seating five passengers and featuring even more amenities. The hybrid version achieves 40 miles per gallon, with over 500 miles of range on a full tank.
Ford sold 131,000 Mavericks last year, indicating substantial demand for small, fuel-efficient trucks. The company has raised the starting price for hybrid versions to $28,150 as of 2024 due to tariffs on trucks assembled in Mexico. Ford confirmed that it would not pass on the entire tariff burden to consumers, offering vehicles at a price equivalent to employee sales until early July.
As with all vehicle types, American pickups have morphed dramatically over the years, with some extravagant models costing as much as luxury European sedans. Electric trucks from Tesla, Rivian, and Ford range from $70,000 to $100,000 or even higher.
Berman is keeping an eye on market opportunities for personas such as entry-level truck enthusiasts, families seeking a second vehicle, empty-nesters, landscapers, contractors, and delivery personnel. The company anticipates selling more trucks to customers who would typically opt for used cars, with an average price point estimated at $26,000.
A significant hurdle for Slate and other firms aiming to sell more affordable vehicles is that many Americans don’t appear to be purchasing such offerings, despite their stated preferences.
Keating highlighted that around 20 models currently available start below $25,000, predominantly small cars or SUVs, including the $18,300 Nissan Versa, the lowest-priced car on the market.
Almost all mid-sized family sedans start below $30,000, including popular models like the Honda Accord, Toyota Camry, and Hyundai Sonata. Yet, many Americans favor larger vehicles; SUVs, pickups, and minivans now comprise over 80% of the market.
Trump’s trade policies remain unpredictable. Analysts hope tariffs will add thousands to new car prices, subsequently increasing demand and prices for used vehicles.
In April alone, Americans purchased 1.5 million new cars, 400,000 more than in April 2024. However, analysts have noted that buyers are acting now to avoid being caught in a crunch later. Jonathan Smoke, chief economist at Cox Automotive, mentioned that new car inventories have reached their lowest point in two years, indicating potential price increases as dealerships sell out ahead of impending tariffs. Meanwhile, S&P Global Mobility has reduced its forecasts for new car sales, anticipating a 4% decline this year.
For those seeking refuge amidst financial uncertainty, electric vehicles present a sound investment, according to Keating. New electric vehicles received an average discount of 13.3% in March, translating to savings of nearly $8,000.
Lee recently leased a Chevrolet Equinox for two years, paying $5,500 upfront, resulting in a monthly payment of $230. The electric SUV boasts a 319-mile range. “Many people aren’t aware of the extensive incentives available,” she noted.
Source: www.nytimes.com
