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.

New to EVs? Start here

  1. Seven Things To Know About Buying a Plug-In Car
    A few simple tips before you visit the dealership.
  2. Incentives for Plug-in Hybrids and Electric Cars
    Take advantage of credits and rebates to reduce EV costs.
  3. Buying Your First Home EV Charger
    You'll want a home charger. Here's how to buy the right one.