Initially, AvtoVAZ president Maxim Sokolov proposed redistributing state support in favor of cars with high localization in Russia. The Ministry of Industry and Trade accepted the claims of the Russian automobile giant and now Avtotor, Moskvich and Motorinvest plants will have to invest in equipping Chinese electric vehicles with Russian parts in order not to lose state subsidies.
“The Russian Ministry of Industry and Trade supports AvtoVAZ’s proposal to establish requirements for localization of electric vehicles participating in government programs to stimulate demand. Active work is also ongoing within the framework of the Federal project “Electric car and hydrogen car”, the ministry’s press service told socialbites.ca.
The project aims to saturate the domestic market with domestic automobiles powered by alternative energy sources. (traction battery and hydrogen fuel cell)and developing charging infrastructure. In addition, the federal project provides a wide range of support measures to subsidize the development of cars and charging infrastructure.
Sokolov made his arguments during the launch of the Lada e-Largus electric car this week.
“e-Largus competes on price with non-localized Chinese electric vehicles.
Their added value is produced abroad, but at the same time, buyers of these cars in Russia receive state support, and this amount is actually equal to the price of a new Lada Granta in the average configuration.
In the current situation, we believe that the mechanisms that will stimulate demand need to be fine-tuned in order to ensure that the funds allocated for state support remain within the country and to strengthen the technological sovereignty of the domestic automobile industry. Implementation of the instructions of the President of Russia” stated President of AvtoVAZ.
What are they fighting for?
In October 2023, the Russian government increased the discount on domestic electric vehicle purchases from 25% to 35% under the preferential vehicle loan program.
In fact, the maximum can reach 925 thousand rubles.
This discount will be available to citizens who purchase an electric car assembled in Russia on credit or through leasing. The state will transfer the specified amount to the bank where the loan was given.
The state program to stimulate demand for electric transport includes cars whose manufacturers have signed a special investment agreement (SPIC) with the state, where they undertake to localize production in exchange for the government’s preferences, including compensation for the recycling fee paid. tax reductions and other measures (SPIC’s terms are individual and not publicly disclosed).
Who will suffer
In 2022, the Motorinvest plant in the Lipetsk region began assembling Chinese electric vehicles Dongfeng under the Evolute umbrella brand from vehicle kits of concern to China. The first to hit the production line was the i-Pro sedan. Its cost, without taking into account state subsidies, is 3 million rubles (with use – 2.1 million rubles).
Later, the Evolute series was supplemented by electric crossovers i-Joy and i-Sky. Taking into account the discount from the state, their cost is 3.1 and 4 million rubles, respectively. The seven-seat i-Space crossover, which is also assembled in the Lipetsk region, is deprived of the state’s preferences because it has a hybrid drive instead of electric drive.
The model range of the revived Moskvich also includes the Moskvich 3e, an electric crossover offered at a price of 3 million rubles, taking into account the state discount. The total cost of this car is about 4 million rubles.
Like Lada Largus, Moskvich 3e has a gasoline analogue – Moskvich 3 with a gasoline engine, costing 2.22 million rubles.
The recently introduced Amberauto A5, whose assembly started at Kaliningrad Avtotor, also falls under state-supported sales conditions.
This car turned out to be a Chinese JMEV GSE.
As stated in the Avtotor release for the launch of the new model, the “pilot” batch of these machines is planned to be sold in the Kaliningrad region in order to gain initial operating experience there.
Deep localization is planned for Amberauto A5 in Kaliningrad. In 2024-2025 it will be equipped with electric motors, inverters, gearboxes, electronic systems and other components labeled “Made in Russia”.
local dealers appreciated They promise a new product worth 3.3 million rubles and a subsidy from the Ministry of Industry and Trade when purchased on credit or leasing.
Sollers had previously announced that it would start production of electric versions of the Sollers Atlant and Argo in 2024, based on localized JAC models.
The companies AvtoVAZ, Avtotor, Motorinvest and Moskvich did not answer socialbites.ca’s questions regarding their attitude to the possible deepening of decentralization and the possible deprivation of state aid.
Competition will decrease
The current situation with equal discounts on all electric vehicles assembled in Russia is implemented within the framework of the concept of developing electric transport on a national scale. It is being implemented and based on its results it will be possible to decide whether electric cars will take root in Russia, independent automotive industry consultant Sergei Burgazliev told socialbites.ca.
“I am on the side of the state to ensure that everyone has more or less equal conditions in terms of market development. From the perspective of industry development and support, we can probably agree that development is possible when there is competition for government subsidies. And if AvtoVAZ insists that it be given more than others, this is a moot point,” Burgazliev told socialbites.ca.
At the same time, he admits that AvtoVAZ is quite capable of obtaining special preferences for itself from the state.
But we have repeatedly seen, for example, that as soon as the state increases the recycling fee, AvtoVAZ immediately increases prices, the expert recalled.
“Electric Largus is more localized than Moskvich 3e, Amber or Evolute. However, it has obligations under SPIC, such as determining the location of the battery. This is good as long as the obligations are fulfilled and the state supports the development of electric transport in general,” concluded Burgazliev.
Maxim Kadakov, editor-in-chief of Za Rulem magazine, believes that the idea of a different approach to state support for manufacturers of electric vehicles will look quite valid if AvtoVAZ manages to use all its means in state institutions to promote it. At the same time, the task of ensuring high localization of e-Largus seems easier, since it has a gasoline analogue with the same body produced in Russia.
“The idea of redistributing government support to more localized means is potentially very feasible. But there are many incoming vectors and different impact forces.
Will AvtoVAZ have enough pressure at all levels of government to implement this decision? Here we need to act on all fronts,” Kadakov told socialbites.ca.
Avtotor and Evolute will have to localize everything from the very beginning and split costs into small-volume production of electric vehicles, unless they have more mass-produced gasoline analogues. All this needs to be taken into account. At the same time, Avtotor provides the basis for component production and will spread large costs across the entire model range, Kadakov added.
“Moskvich” is somewhere in the middle, because the body of the electric model is almost the same as the gasoline model. “Muscovite is currently engaged in welding and painting of trunks, and if it masters this, it will be the same story as with Largus,” Kadakov concluded.