In this article STLA Follow your favorite stocks CREATE FREE ACCOUNT

Chip Motors plans to produce a four- or six-seat low-speed vehicle, which it is calling a "life utility vehicle, named Chip. Courtesy image

The next big idea in the U.S. automotive industry may be small. A growing number of companies, including auto giant Stellantis , are betting Americans are ready to embrace smaller, less expensive vehicles amid yearslong affordability concerns for the U.S. auto industry. But the vehicles aren't technically "cars." They're electric low-speed vehicles, or LSVs, that are essentially a step above a traditional golf cart but below a typical light-duty car or truck sold in the U.S. "We have seen the popularity of many different form factors of electric, small low-speed vehicles continuing to grow," Keith Simon, CEO and cofounder of Waev, which owns several LSV brands such as ex-Polaris brand GEM, told CNBC. "I think it's evident by the number of new entrants across many different vehicle types. There's a lot of new players. … It's been growing significantly." Attention on such vehicles has been magnified during the past year by President Donald Trump. He has discussed opening U.S. roadways and regulations to better allow for smaller vehicles, including LSVs from Europe and Japan's "Kei cars," on U.S. roadways. "I'm giving all American car companies the right to build what are known as tiny little tiny cars," Trump said during a speech last week at General Motors' Milford Proving Grounds in Michigan. "I go over to Europe and I see these little cars all over the place and I say, 'Why aren't we making them?'" Small cars have historically not performed well in the U.S., but those involved with LSVs believe they could be a growth market for Americans who want an affordable, easy-to-drive vehicle for short distances. They also can typically be charged overnight with a traditional household outlet compared with typical, more expensive EVs that need special chargers that can cost thousands of dollars.

Waev's lineup of GEM low-speed vehicles, starting at Courtesy image

Reliable data on the U.S. LSV market is limited since of the vehicles don't need to be registered, but they're part of a larger "micromobility" segment, which consulting firm McKinsey & Company last year estimated could more than double in size globally by 2030. "The global micromobility market is on the upswing. McKinsey estimates that the market was worth about $160 billion in 2022; by 2030, it's estimated to reach $340 billion," according to its McKinsey's Center for Future Mobility. That includes North America's market growing from $20 billion in 2022 to $35 billion by 2030. For U.S. consumers, companies such as Stellantis' Fiat, Waev and startup Chip Motors are focusing on electric streel-legal LSVs, many of which are starting around $15,000, a fraction of the nearly $50,000 average price tag for a new traditional car or truck.

Tiny cars, tiny market

LSVs vary in form and can be heavily customized, including the number of seats, electric range and available features, such as optional doors. They're typically used for short distances, often for people living in closed community settings such as retirement homes or condominium complexes. Their main competition has traditionally been golf carts, not small cars. "The use case for these kind of vehicles has become more interesting as people have evolved their lifestyles, and a vehicle like this fits into their lifestyles," Simon said. The market is loosely regulated compared to the light-duty vehicle market that dominates the U.S.. but the vehicles must not go faster than 25 mph and have to be equipped with standard safety features such as headlamps, turn signals, mirrors and a windshield that conforms to the federal motor vehicle safety standard. They're not required to have airbags and they're allowed on roadways with speed limits of up to 35 mph.

Stellantis plans to offer the Fiat Topolino, an all-electric quadricycle vehicle, in the U.S. Stellantis

"The market demand is here now and you don't need nearly as much capital to bring a LSV to market," said Jameson Detweiler, CEO of Chip Motors, which last month revealed a new LSV that's expected to go into production early next year. "What we've seen in the market … is just incredible latent demand." Detweiler estimates the street-legal LSV market to currently be in the hundreds of thousands of units in annual sales, but below 500,000. He believes as more companies such as his enter the market, the more awareness and sales will grow. But for now, they're small vehicles for a tiny part of the U.S. market, according to Stephanie Brinley, principal automotive analyst at Mobility Global. "They're less expensive than a normal car, but they're not expected to be a normal car, and and people buy them as recreational vehicles," she said. "There's great uses for them, but these are not part of of a day-to-day work-life commute for most people."

New entrants

Detweiler's company describes its vehicles as a "life utility vehicle," named Chip. It looks like a beefed-up golf cart with a smiley, digital interactive face. The four-passenger vehicle is expected to start at $15,000 for an entry-level model, and it can also come in a six-seat model. Detweiler plans to grow Chip to eventually be capable of self-driving technologies. In the meantime, he said the privately funded company expects it to be used more as a second vehicle, with plans to offer a service in which Chip employees can virtually remote into the vehicle to assist with driving and parking, he said.

The Chip "life utility vehicle" positioned between two Ford F-150 pickup trucks. Courtesy image

"I really value and like the idea of when the future seems fun and promising," said Detweiler, a Florida native, wearing a Timon and Pumbaa shirt from Disney's "Lion King." "A lot of technology is probably headed more 'Blade Runner.' We want to head more 'Jetsons' era." The company expects to begin sales in Miami, which officials say is a popular market for such vehicles. The Florida coastal city also is where Stellantis' Fiat brand is first offering its Topolino vehicle, which also starts around $15,000 and features the styling of the Italian brand's iconic 500 city car. The Topolino, which translates to "little mouse" in Italian, is actually a quadricycle. It has grown in popularity in Europe and the company is starting to sell it in limited numbers in the U.S. Fiat CEO Olivier Francois is using the vehicle as a test bed to potentially refocus the famed Italian brand, which has struggled for years in the U.S., to focus on micromobility rather than traditional cars. "I want Fiat to become the brand of micromobility within Stellantis," Francois told CNBC. "I want to use America to test and learn. And, hey, if along the way I do some good volumes and good business, it doesn't hurt."

2026 Fiat Topolino Dolce Vita. Courtesy Fiat