Initially, Maxim Sokolov, president of AvtoVAZ, urged redirecting state support toward vehicles with higher localization within Russia. The Ministry of Industry and Trade accepted this proposal, outlining that Avtotor, Moskvich and Motorinvest plants must invest in equipping Chinese electric vehicles with Russian components to keep benefiting from subsidies.
The ministry confirmed support for localization requirements for electric vehicles taking part in government demand-stimulating programs. Work continues under the federal project Electric and Hydrogen Cars, which aims to boost the domestic market with locally produced cars powered by alternative energy sources and to expand charging infrastructure. The project also provides a broad package of subsidies to aid both car development and charging networks.
The arguments were presented during the unveiling of the Lada e-Largus electric car. The project positions e-Largus as price competitive with non localized Chinese electric vehicles, while emphasizing that the added value is generated abroad. Buyers in Russia receive state support that effectively matches the price of a new Lada Granta in its standard configuration.
Industry leaders argue that demand stimulation mechanisms should be refined so that state funds stay within the country and reinforce technological sovereignty in the domestic auto sector. This stance was echoed by the AvtoVAZ leadership during the debate on current subsidies and localization measures.
What They Are Fighting For
In October 2023, the Russian government expanded the discount on domestic electric vehicle purchases from 25 percent to 35 percent under the preferential vehicle loan program. The top discount could reach 925 thousand rubles. The discount applies to Russian assembled electric cars bought on credit or via leasing, with the state transferring the allotted amount to the lending bank.
The state demand stimulation program covers vehicles from manufacturers that signed a special investment agreement with the government. These SPIC partners commit to localization in exchange for preferences such as recycling fee compensation, tax reliefs and other measures. SPIC terms vary and are not publicly disclosed.
Who Will Be Affected
In 2022, the Lipetsk region saw the Motorinvest plant begin assembling Chinese electric vehicles from the Dongfeng range under the Evolute umbrella. The i-Pro sedan was the first to roll off the line, priced at 3 million rubles before subsidies, and around 2.1 million rubles with support.
Later Evolute expanded with the i-Joy and i-Sky electric crossovers, priced at roughly 3.1 million and 4 million rubles after discounts. The seven-seat i-Space crossover, also assembled nearby, fell outside state preferences due to its hybrid drive.
The Moskvich lineup includes the Moskvich 3e, an electric crossover offered around 3 million rubles with the state discount, totaling near 4 million rubles. A gasoline analogue, the Moskvich 3, remains available at about 2.22 million rubles.
The Amberauto A5, assembled at Kaliningrad Avtotor, also participates in state-supported sales. This model is based on the Chinese JMEV GSE. Avtotor announced a pilot batch of cars would be sold in Kaliningrad to gain initial operating experience. Local localization plans for Amberauto A5 include 2024 to 2025 targets for Made in Russia components such as electric motors, inverters, gearboxes and other systems. Dealers anticipate a price near 3.3 million rubles with subsidies available on credit or leasing.
Sollers has previously announced plans to start producing electric versions of the Atlant and Argo in 2024, leveraging localized JAC models. The firms AvtoVAZ, Avtotor, Motorinvest and Moskvich did not respond to inquiries about potential decentralization and the risk of losing state aid.
Competition and Market Impact
The current approach offers uniform discounts for all electric vehicles assembled in Russia and aligns with a national plan to expand electric transport. Industry observers note that the outcome will influence whether electric cars become entrenched in the Russian market and how competition shapes subsidies. A leading expert suggested that equal conditions foster market development, while recognizing that AvtoVAZ might secure favorable treatment if it can leverage state channels effectively.
Analysts also observe that price adjustments often follow changes to recycling fees, with AvtoVAZ sometimes reacting by adjusting prices. The e-Largus, for instance, is deemed more localized than some rivals like Moskvich 3e or Evolute models, provided SPIC obligations are met, including battery location determinations. This is viewed as beneficial so long as the state continues backing electric transport overall.
Industry observers also note that reforming subsidies could be viable if AvtoVAZ successfully mobilizes influence across government tiers. If AvtoVAZ strengthens its position, it could push for broader localization. At the same time, Avtotor would need to localize components from the start and distribute costs across smaller production volumes unless a mass market for gasoline analogues exists. Avtotor would, however, provide a foundation for broader component production and spread high costs across the model range.
Meanwhile, Moskvich is positioned between extremes since its electric body is closely aligned with the gasoline model. If it can master welding and painting for its electric trunks, it could mirror Largus’ trajectory. The debate continues as the industry weighs policy choices, localization timelines and the future scale of domestic versus foreign technology in Russia’s evolving auto sector.