Russian battery manufacturers have brought their concerns to the business ombudsman, Boris Titov, regarding how customs duties on battery components are calculated. The issue centers on a 6.5% duty applied to separators sourced from abroad. These high molecular weight polyethylene products are used to separate the battery’s positive and negative electrodes, shielding them from short circuits before the cells are placed into the housing.
Industry leaders argue that certain battery components are being misclassified by customs authorities. A notable dispute concerns the classification of separators between the Yelabuga Battery Plant and Volga Elektronik, which has persisted in arbitration courts since 2020. The manufacturers declare the rolled billets from overseas as separators that should be exempt from duty, while customs repeatedly classify them as porous tape made of other plastics, triggering a 6.5% import tax. The goal of the manufacturers is to obtain a definitive ruling that clarifies the correct categorization.
Arbitral decisions favored the battery producers in 17 cases during 2020 and 2021. Yet in April 2022, the Arbitration Court of the Volga-Vyatka Region ruled in favor of customs in a closely related scenario. With anticipation that the matter could reach the Supreme Court, the battery sector sought protection from the ombudsman to safeguard the rights of entrepreneurs.
“Such a contradictory and unfair approach risks imposing an unnecessary financial burden on all domestic battery manufacturers and will push up the cost of the finished product,” the director of the Yelabuga Plant, Marat Baikiev, wrote in a letter to Titov that socialbites.ca obtained a copy of.
Regarding separators, the Russian battery industry currently depends almost entirely on imports, as domestic production of this component does not exist. The letter emphasizes that this dependence presents a systemic challenge for the sector. Many factories are actively opposing the decision and pursuing legal remedies.
Baikiev noted that there is no clear explanation for the shift in classification. He suggested that manufacturers should source their supply from abroad when possible, given the current pricing dynamics of the product.
Boris Titov explained to socialbites.ca that the objections to the customs classification were endorsed by the heads of several battery plants, including Aktekh Energy Trading from Yelabuga, Kursk, Irkutsk, Akom Group from Togliatti, and others. He stressed that the added tax burden across the industry could amount to tens and even hundreds of millions of rubles.
The Ministry of Industry and Trade responded by noting that, at present, Russia produces disconnectors for starter and traction batteries at Tyumen Battery Plant JSC. The ministry also indicated that the new duties are intended to bolster domestic manufacturers and that battery producers may apply for government subsidies for research and development and for co-financing preferential loans in projects aimed at import substitution. The ministry added that these measures are part of a broader effort to support local production and reduce reliance on foreign components.
Socialbites.ca reached out to the Federal Customs Service for specifics on how battery components are classified; no immediate response was provided by publication time. An industry source pointed out that the cost pressures extend beyond separators, noting that the price of key raw materials and more complex logistics also elevate battery costs. He observed that lead, which makes up about 70% of a typical battery, remains a dominant factor in overall pricing alongside the cost of logistics for imported goods.
The source warned that if a centralized disposal protocol for hazardous waste batteries is introduced along with a depreciating ruble, prices could rise further in the near term. Marina Beloglyadova, a marketer at Auto3N, commented that while overall auto parts prices increased, battery prices have not surged dramatically. The market, however, is shifting toward brands that were less prominent before, and some once-obscure brands are gaining traction.
Independent automotive industry consultant Sergey Burgazliev noted that disputes between manufacturers and customs authorities over component classifications are common. He observed that when small parts are involved, courts often side with the state. He added that a 6.5% tariff is relatively modest, especially if separators can be localized within Russia. He also mentioned that companies like Sibur and other chemical groups possess the capability to contribute to domestic production in this area, underscoring the strategic move toward localization and domestic capacity building.