The best way to stimulate the electric transportation market is to subsidize the end buyer. Not subsidizing the station purchase, machine production or localization process to manufacturers. Only the final demand for the electric car, which is the last element of the industry, plays a role. With high demand, automobile production will increase and the production volume of charging stations will increase.
There were subsidies of up to 3,000 euros under government programs for the purchase of electric vehicles in China by the end of 2022. In 2023, the government extended the tax exemption for the purchase of new electric cars.
In Norway (today this country is the leader in the transition to electric cars in Europe), the import duty was reduced and there was a 25% VAT exemption on the purchase of all electric car brands until the end of 2022. cars. From 2023, this feature is available with some restrictions. For several years, the perks of parking, traveling on toll roads, traveling on dedicated public transport lanes worked. In other European countries, subsidies of up to 5,000 euros were introduced for the purchase of an electric car, as well as various discounts on the payment of transport tax.
Subsidy programs are working, as sales data in these markets show. In Russia in 2023, a car loan on favorable terms, including the purchase of an electric car at a discount of up to 25% of the price, is not available to all buyers, but only to certain categories. And only cars produced in the Russian Federation fall under the terms of the program: AVTOVAZ; UAZ; GAS; HAVAL (produced at a factory in the Tula region); Evolute electric vehicles.
It is necessary not only to provide subsidies to all buyers, but also to link the amount of allocated government support limits to the actual demand for electric vehicles. As previous experience has shown, the funds allocated for the preferential car loan program run out within 1-3 months and the program is closed.
In my opinion, a subsidy of 300 thousand rubles to the buyer of electric cars in Russia, not only as part of a car loan, can seriously affect the increase in demand. In parallel, an incentive tool such as the introduction of zero customs duty on imports should be reused.
Free parking, discount on toll roads, special lanes etc. advantages do not significantly increase the interest in electric trains, but still create comfortable conditions for owning and using electric cars, they can be brought optionally.
The introduction of a long-term system that subsidizes consumers will bring our industry the ability to engage in long-term contracts and at least medium-term planning. The industry now lives on 3-5 month supply contracts. Introducing a subsidy for the purchase of an electric car for three years or more, or tying it to thresholds, for example maintaining the subsidy until 15% of all new cars are sold electrified, would allow these same EFS operators to calculate market growth as: much for their financial model higher accuracy, which means fewer “bumps” for greater risks and ultimately longer supply contracts with EZS manufacturers. These factors will lead to a lower cost of the product and to organize a larger amount of infrastructure for the same money, produce more electric vehicles and lower the final price.
The past year has been an explosive year of growth for the electric vehicle industry and charging infrastructure, despite some adjustments brought by political and global events. So, in 2022, Russia launched the production of four models of electric cars with different degrees of localization, and this trend will be supported by mechanical engineering, which has a lot of evidence from industry analysts.
After the withdrawal of the main brands of automakers from the market, the range of cars has decreased and it seems that parallel imports do not affect the improvement of the situation. Our expectation for today is that the market will be captured by Chinese manufacturers and if we are lucky, other Asian players, for example Korean players, will return to the market.
In this respect, the creation of our own production facilities is certainly good, even if 95% of the assembly consists of imported components, as it will directly and indirectly affect the development of the sector and the formation of competencies, especially personnel, within the country. There is a “downhill” of technologies, a “downhill” of the value chain, the opportunity to carry out technological operations in one’s jurisdiction opens. Even 1 kopeck added value and localization of an operation is better than 100% import of the finished product. Let there be more players in our industry who open such production facilities and localize China, India and other solutions.
Charging infrastructure goes hand in hand with the development of the electric transportation industry. But there are certain features here. All over the world, infrastructure developed first, then electric transport, and in Russia, on the contrary, the electric transport market is now experiencing a boom and the infrastructure is stagnant and developing much more slowly. And 2023 will be another breakthrough year for charger manufacturers.
We launched a federal subsidy in 2022, many rules were changed on the go, the methodology of receiving subsidies by organizations and distribution among operators was determined. The requirements for subsidized charging stations were only accepted in the middle of last year and are still being improved by the end of the year. Heavy-duty manufacturers need time to prepare for mass production of stations that meet these requirements. All this was a race against time, and according to industry experts, only 60-70% of the program was implemented. I am confident that the federal programs announced in 2023 will be fully implemented and we will see a lot of growth in charging stations installed across the country. Meanwhile, many installed electric charging stations are not operational: they are either in the process of being introduced or are not yet part of the networks, meaning many drivers do not know about them yet. This will be the year when the scale of installation of charging points will be appreciated by end users, electric vehicle owners.
How does Russia’s electric vehicle and charging station market lag behind other countries’ markets? As a market, the most important issue we lagged behind is volumes. Ultimately, it is the size of the market that determines the absolute amount of marginal investment, which in turn determines how many new products we produce and how we develop new technologies. We have an extremely small venture capital market and very little investment in the development of the industry is made by independent players. I can immediately name only two innovation financing institutions operating in the country – the Innovation Assistance Fund and Skolkovo. There should definitely be more instruments, because these are where they understand very clearly that in order to get something, you must first invest in something. To achieve the result of the creative process, it is necessary to deposit non-refundable funds and not to issue a loan secured by engineer apartments.
The author expresses his personal opinion, which may not coincide with the editors’ position.
Source: Gazeta
Dolores Johnson is a voice of reason at “Social Bites”. As an opinion writer, she provides her readers with insightful commentary on the most pressing issues of the day. With her well-informed perspectives and clear writing style, Dolores helps readers navigate the complex world of news and politics, providing a balanced and thoughtful view on the most important topics of the moment.