Neighborhood Electric Vehicles: A Marginal Option

By · May 15, 2013

GEM e2 Neighborhood Electric Vehicle

Acquired by Polaris Industries in 2011, GEM is the market leader for neighborhood electric vehicles. The e2 sells for below $8,000.

Visit certain cities around the world, and you’ll see tiny electric cars quietly whizzing around the streets, taking residents and holiday makers from place to place, delivering goods, or even doing the daily commute.

Called Neighborhood Electric Vehicles—NEVs for short—these small cars don't have the range or performance of bigger, highway-capable cars like the Nissan LEAF. But they can provide some consumers the first real-world experience of electric cars without breaking the bank.

Living with Limits

In most states, NEVs are electronically restricted by law to a top speed of between 25 and 35 miles per hour. In some cases, this means they cannot be driven on roads with a posted speed limit of 25 mph or greater, severely restricting where they can be driven.

Speed isn’t the only thing that’s limited in NEVs. Because most are powered by heavy battery packs—usually with lead-acid cells—they may also have a limited range compared to more advanced highway-capable electric cars. As a result, NEVs are best suited to short-range duties, where daily mileage requirements are between 25 and 30 miles between charges. In extreme cold, range may drop further, as much as 20 percent less.

Although there are some exceptions, most NEVs are also smaller than conventional electric cars. Many of them, such as the no-longer produced ZENN car, have only two seats, making them suited for couples or as a second family car for running local errands.

Budget Prices

While the list of limitations for NEVs is long, they do have one compelling advantage over more capable electric cars: price.

New and used NEVs can cost much less than full-sized EVs, making them ideal for those who want to save money on weekly gasoline bills, without paying tens of thousands of dollars for a new EV. For the reduction in price however, you get more than just reduced range and performance. Even features such as car stereos and heaters—and in some cases, even doors—can be expensive optional extras.

Unlike full-sized, highway-capable EVs—which come with battery packs capable of lasting for hundreds of thousands of miles—the cheap lead-acid battery packs found in NEVs require replacing every few years at a cost of up to several thousand dollars. Those keen with a wrench can often replace an NEV’s battery pack for several hundred dollars, but those who hate D.I.Y. projects should budget for future battery replacements when buying a NEV.

Buy with Caution

While many EV owners, including this author, cut their teeth on electric cars thanks to a NEV, owning one today should only be considered if a full-size, highway-capable EV isn’t possible.

With limited range, space, power and features, NEVs really do work best when driven in gated communities, small towns, or on predictable surface-street commutes.

With these caveats in place however, a willingness to do some maintenance yourself—and with a gasoline car as backup for longer distance weekend trips or family outings—a neighborhood electric vehicle can help you save a lot of money on gasoline. If you pinch enough pennies and dollars, and enjoy the overall experience, you could be well on your way to owning a full-size, highway capable EV.


· · 5 years ago

I was going to buy a GEM back when Chrysler was selling them, but a restaurant owner friend told me she was having trouble getting it serviced, and then when I checked, the insurance was much higher than for my normal car.

I checked the Polaris Website. These are very old fashioned cars at this point seeing as they have not modernized anything in the decade they've been around.

· · 5 years ago

NEVs were interesting at one point and do have some uses. But they are largely pointless now, at least in the USA.

They only get a 10% tax-credit and the $7500 tax-credit reduces the price of a Mitsubishi-i down to near an NEV price so why not get the real full-speed car for a few thousand more?

· · 5 years ago

A GEM could be a perfect second car for most people. If work is local, it could be the primary car.

I purchased my GEM used for $2500 and converted it to lithium for about $5000. Insurance in California is $76/year, registration is $79/year. It has an 80 mile range with the lithium battery pack, good for at least 3000 cycles. Already being electric, the conversion to lithium was not a difficult process.

The GEM is now the only vehicle I own. What's the sense in owning another car? I can rent a car for $10/day Friday through Monday, with my only other expense being the gas it uses. Enterprise even picks me up at home and drops me off back home.

They were about to release the next gen GEM model (called the Peapod) just before the Chrysler bankruptcy and restructuring.

Only the external appearance of the GEMs has remained the same. The GEMs have evolved internally almost every year.

· · 5 years ago

I live at the beach and these Gems are really popular here. I really wanted one a couple of years ago. But, I couldn't get across town to work or the store, because they are 45 MPH streets. They only work in the downtown area, most of which I can already walk to.

· · 5 years ago

Another doom and gloom article by Nikki Gordon-Bloomfield -- comment from 'bgeery' did a better job compare to your biased 'report'. GEMs are not the only game in town, however, NEVs are perfect applications for city and urban centers. 'Range anxiety' was subconsciously created by article writers like yourself. Not everybody needs to go on the highway -- "Buy with caution"...more fear mongering. Every time someone shoves that gasoline nozzle in their car is a vote for crude ambitions.

· · 5 years ago

Hi TedB -- I'm not sure what you feel is so poor and biased. NEVs are great for gated communities and predictable city centre drives, but not for those who tackle the day-to-day melee of rush hour on more busy routes.

I've owned several NEVs over the years. My first, a 1998 City El from Germany, had a top speed of 35 mph. I later improved that to 50 mph with some battery modifications. It was certainly an NEV, and limited in every way. That said, it provided me with the bug I needed to stay driving electric.

My next EV (after a self-converted 2004 plug-in Prius) was a free G-Wiz (REVA). Again restricted by speed and performance, it did a passable job as a local errand car, but couldn't handle the type of trips that full-size EV drivers do on a daily basis.

Today, we own a full-size EV (Nissan LEAF) and a quasi- NEV (Renault Twizy). While faster than most NEVs, the Twizy is limited to a top speed of 52mph, and has a realistic range of between 30 and 40 miles per charge. It's my main vehicle and I love it dearly. However, with so many compromises, not everyone would choose such a vehicle.

NEVs are great, but we can't fool ourselves into thinking that most consumers would want to buy them: they're simply just too underpowered and feature-compromised for many mainstream buyers. As a journalist and I hope pragmatic advocate, I have to present both sides of the equation :)


· · 5 years ago

The majority of NEVs are sold not to consumers but to universities, parks and the like. This is a big growth area for NEVs as organizations implement sustainability initiatives or try to green their fleets. They are often replacing pick-up trucks in these fleets. Some of these organizations are trying to replace as many gas vehicles as possible with NEVs.

· · 5 years ago

Ugh. They lack everything a "real" car has, including side windows, a heater, and space for the kids. They also lack any safety features beyond seatbelts, and as a result, are expensive to insure.

Personally, I would rather just ride my bike, even in winter, since I'm about equally exposed to the elements and I get more exercise that way. My bike trailer holds more stuff than this thing does, and my range actually exceeds what this thing can do.

Nevermind how that, if we want to be EV evangelists by owning electrics (it happens anyway - people ask questions when they see your car), the last thing we need is a long list of caveats that include things like "I can't drive it on the highway or even over the bridge where the speed limit is 70+ km/h". When curious onlookers and coworkers discover that my wife owns an electric car, *this* is the first thing they think of, not the Leaf she drives, and she has to do a lot of educating that often starts with "It has a top speed of 150 km/h, and a range of at least 120 km". It's "cars" like the GEM that hurt the all-electric brand more than *anything* else. If I were Nissan or any other serious EV manufacturer, I would buy *all* these companies up and sell them for scrap (why not? GM did that to every streetcar in America).

· · 5 years ago

IMO, the Nissan Leaf and Tesla battery issues are currently doing more harm to the EV cause than anything I can think of. I read on the EV forums about Leaf drivers poking down the highway at 53MPH to extend range and battery life. That must sell alot of ICE drivers on the EV concept.

If needed, there are GEMs with doors, heaters, seating for up to 6. You can haul 330-1100 lbs of cargo in a GEM, depending on model.

NEVs are NOT expensive to insure in California, and at least 34 other states that Foremost insures NEVs. My GEM is insured in California for $76 a year through Farmers. The low insurance costs are one of the reasons I own a GEM. The speed limitation of 25MPH allows for the lower safety standards of NEVs.

If a NEV won't work for you (because you're too good for one) that's fine with me. But don't fool yourself into thinking you need your full size car (EV or not) to do 90% of what you actually do with it. This applies doubly for a multi-car household. An NEV can work for most people, in most places, for most things, and do it for a much lower cost of ownership. Yes, some compromises may be required in some situations. So what.

You are spending $400-$700/mo to own a Leaf. My GEM is costing me around $50/mo (including savings for replacement) + $40 (including gas) a few times a year for a rental. While you blow the money on a Leaf, I'll invest the $3K-$7K/year savings from buying and operating my GEM.

· · 5 years ago


I think it's great that you own a Gem and it works for you. It definitely wouldn't work for most people, including me. They just don't go fast enough to be legal on most of the streets I need to drive on. It's not like I am too good to drive one. A NEV is just not practical where I live. A NEV isn't practical where most Americans live and work.

A LEAF would work much better, but I'm holding out for more range.

· · 5 years ago


California must subsidize or some other ways encourage GEMS, maybe thru cheap insurance. Ny State where I am doesn't lift a finger.. I couldn't BELIEVE HOW HIGH the insurance is for this car. (They must view it as so unsafe they need beaucoup bucks).

· · 5 years ago

I own 2005 OKA NEV ZEV (in Las Vegas) and 2009 OKA NEV ZEV (in Burbank, CA)
Never needed to go more than 16 miles on charge, and typically it is 5 miles to 10 miles before I plug into 120 V AC.

Great EV and a REAL CAR - but the Saving in Fuel, in any EV is illusion unless you lease it for 2 or 3 years, as the moment you need a new battery be it ZENN, GEM or OKA, all the money you ever saved at the pump, is instantly GONE !!!

EV even NEV, is a LUXURY to drive, one thing EV proponents seem to need to lie about ALL THE TIME, but from 12 other EV drivers I know 9 of them just parked and abandoned their vehicles when the battery lost significant range in as few as 2 years of use.

So the 80,000 mile warranty that does not apply to NEV (2 years at best) is the only + for a full speed EV, but even then they warn you that "loss of capacity = range" is NOT a warranty issue (like in LEAF).

So considering that VOLT is the only long term sensible alternative that is if you do not think of it as a MALIBU with 130,000 miles of FREE GAS, prepaid upon purchase.

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