Russia could provide ready-made market for Hyundai Kona BEV.
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Russia Wants to Grow EV Market Virtually From Scratch
The government's plan, modeled on China's Zero Emissions Vehicle policy, includes subsidies to both manufacturers and consumers. It calls for BEVs, which currently number about 10,000 in Russia, to comprise at least 10% of the country's light-vehicle market by 2030.
Eugene Gerden | Aug 24, 2021
The Russian government wants to develop a market for battery-electric vehicles and is targeting the production of at least 28,000 BEVs annually by 2024.
The government's plan, modeled on China's Zero Emissions Vehicle policy, would include subsidies to both manufacturers and consumers. It calls for BEVs, which number about 10,000 in Russia, to comprise at least 10% of the country's light-vehicle market – 1.6 million units in 2020, per Wards Intelligence data – by 2030.
The plan also commissions 2,900 fast-charging stations by 2024 and 27,000 by 2030.
The cost of the BEV scheme is estimated at RR590 billion ($7.9 billion), with private investments accounting for RR500 billion ($6.7 billion). Most of the funds would be dedicated to developing charging infrastructure, with some of the funds earmarked for developing alternate EV and hydrogen-fuel-cell technologies.
The government is negotiating agreements with foreign automakers that currently do not manufacture vehicles in Russia to produce and distribute BEVs within the country, Denis Pak, director of the Department of Automotive Industry and Railway Engineering in the Russian Ministry of Industry and Trade, has said.
The government plan calls for issuing low-interest loans to both global and domestic producers of low-carbon-emission transportation. Details have not been announced. Consumers, meanwhile, would receive a subsidy of up to 25% on a BEV costing RR2.5 million ($30,000) or less.
Industry analysts say leading local manufacturers, such as Kamaz, may be interested in producing BEVs for the Russian market. Representatives of the foreign automakers declined to comment, but the consumer subsidies could provide the companies with an incentive to introduce relatively low-cost BEVs already in their lineup.
The plan would see charging infrastructure and EV distribution concentrated in Russia's largest cities, including Moscow and St. Petersburg, where most of the country's EVs already are located.
The overall Russian light-vehicle market, meanwhile, is recovering from last year's depressed sales and the economic consequences of the COVID-19 pandemic.
According to Wards Intelligence data, 1.03 million light vehicles were sold in Russia through July, up 30.7% from the same period of 2020. The Association of European Business predicts deliveries will total 1.76 million units for all of 2021, a year-on-year increase of 9.8% and significantly higher than the initial estimate of 2.1%.
Analysts credit the sales increase in part to the postponement of an increase in utilization fees, and they predict sales may not decline until year's end.
Domestic producer AvtoVAZ is by far the market leader, with a market share exceeding 20%, followed by Kia and Hyundai. AvtoVAZ is favored by consumers interested in prompt and inexpensive service, and the brand has a good reputation for safety.
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