Russia plugging into electric vehicle market: Fuel for Thought
OREANDA-NEWS. The world has seen a surge in electric vehicle use in recent years, but that plug-in push has not sparked as brightly in Russia.
The general perception has been EVs would not work in a country with such a harsh climate, underdeveloped infrastructure and cheap motor fuel.
One Russian cartoon published just a few years ago featured a car with a disproportionately large rooftop plug driving through endless forests in a desperate attempt to find a socket.
Russian interest, though, has been growing.
While the country is unlikely to see a major EV boom any time soon, there’s much more potential today for that cartoon to become more real life than ridiculous.
Russia saw a 28% year-on-year increase in EV purchases last year, which is in line with global trends, but its market remains miniscule.
Only 82 EVs were sold in 2017, pushing the country’s total to 1,771 registered at the end of the year, according to Autostat, an analytical agency specializing in automobile markets.
In China, the fastest developing EV market in the world, 2017 sales totaled 603,300 plug-in passenger cars, up 72% year on year, data in the EV-Volumes world sales database showed.
Global sales of e-cars were estimated last year at around 20,000 a month, as total annual sales topped 1 million for the first time.
Russia still faces some key challenges for the industry to grow, including freezing winters that could significantly reduce EV use and a subpar e-charging infrastructure limited by low demand.
There are just 53 operational e-charging stations in Moscow, the largest EVs market in Russia, but plans by electric grid company MOESK call for totals to increase to more than 150 in 2019. That number is still dwarfed by other major cities. Paris, with a population 30% less than the Russian capital, currently is home to more than 750 charging stations.
“In the foreseeable future, there are no broad prospects for EVs in Russia due to their [high] cost and relatively cheap gasoline price,” Vygon consulting analyst Alexander Bylkin said. “Zero import duty, parking benefits and the expansion of e-charging infrastructure are unlikely to change this trend.”
Despite many headwinds, Russia expects the growth of its EV market will likely intensify as technological development supports interest in environmentally-friendly transportation. Authorities are now looking more specifically into ways to bring the innovative industry to their streets.
“In general, we expect a significant growth in the EVs market, which will amount to up to 5% of Russia’s automobile fleet by 2035,” the energy ministry told S&P Global Platts. “The actual prospects for the market, however, are heavily dependent on technological developments that aim to reduce the cost of EVs and develop infrastructure.”
Officials recently announced plans to provide support for the development of the e-charging network and ordered the economy development ministry to analyze global EVs trends and their impact on the Russian economy by late September.
The Moscow government has targeted a complete replacement of the city’s bus fleet with e-buses within three years. The first regular e-buses routes are appear as soon as this year.
The move has been criticized by many, as authorities plan to abolish the existing trolleybus network for the much more expensive e-buses.
The buses are estimated to travel 50 km to 80 km on a single charge, but that distance could decline significantly during winters with temperatures of minus 20 degrees Celsius not uncommon.
Authorities, looking to mitigate skepticism, have said the buses will be equipped with a heating system to maintain battery capacity in winter.
And a plan by Tesla to enter Russia later this year may also provide an additional impetus for development of the market.
The global leader in EVs production is set to launch Russian sales of its new Tesla Model 3, which is to cost roughly half its previous models, in the fourth quarter. The move will to follow a nearly 50% increase in Tesla imports seen in 2017, even without an official presence in the country.