Electric dreams of the Ministry of Industry and Trade // Olga Nikitina about electric vehicles and reality

Most foreign auto concerns are studying the possibility of producing electric vehicles in the Russian Federation, said the head of the Ministry of Industry and Trade Denis Manturov in an interview with TASS. I could not resist and sent this quote to my sources in the companies: they, as expected, gave a unanimous reaction – a smile.

But I would say that everyone is smiling nervously. Because right now, the government’s plans for electric vehicles are a stick without a carrot. The focus is on accelerated production with the localization of the main components – engines and batteries – already from 2025. But apart from KamAZ, only the mythical electric vehicles “Motorinvest” (previously assembled Chinese cars) and “Avtotor” participate in this virtual race. Denis Manturov also mentioned Zetta, the launch date for serial assembly of which is constantly being postponed.

Foreign concerns, on the other hand, have never expressed a desire to produce electric vehicles in the Russian Federation. So, on July 2, Hyundai openly announced the inexpediency of their localization at the current level of demand, since it becomes reasonable with the release of at least 10 thousand cars per year. It is unclear where such volumes will come from, given that all sales of new and used electric vehicles in 2020 amounted to 6 thousand units. My sources ask reasonable questions: why produce electric vehicles in a country with no component base and no market? Exports from Russia to the key markets for electric vehicles – the EU and China – are closed by duties, in the EAEU, just like in the Russian Federation, there is no infrastructure and demand, says one of them.

The authorities, of course, have already drawn the market for themselves. For example, in the concept of the Ministry of Economics, the consumption of electric vehicles would grow 1.5-3 times annually: from 1.7 thousand new cars in 2020 to 254.4 thousand in 2030. The question is, what does this give to concerns that have already burned themselves out on previous forecasts and live with underutilized factories, and what the state is ready to do to bring these figures to life.

So far, the situation looks like the government of the Russian Federation demonstratively ignores world experience and does everything in spite of it. So, in Europe, the authorities give benefits to car buyers and at the same time impose restrictions on cars with an internal combustion engine, that is, they work with demand. In Russia, they decided to start with a proposal: Denis Manturov says that “we will act gradually, introducing not bans, but requirements for a certain quota for the production of more environmentally friendly cars.”

It is not yet clear how this will be implemented: perhaps through the refusal of compensation for waste collection for those who do not fulfill the quota. One gets the impression that the collection of funds from the import of cars in the form of waste collection and duties, and then their partial return to the industry, is both the only instrument and the only goal of industrial policy in the auto industry.

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