Russia may be close to having a foreign car manufacturer launch electric vehicle (EV) production in the country soon-a move that analysts at IHS Markit described as "bold" considering the lack of infrastructure and government support for EVs and the extremely low number of EVs in circulation in Russia.
Russia's Deputy Minister of Industry and Trade Alexander Morozov said last week, as reported by Russian news agency Interfax, that next year Russia, together with foreign manufacturers with solid operations in Russia, would launch the next electric car.
Russia is also planning to produce its own all-Russian electric vehicle, the Zetta, in December this year, Interfax reported. Zetta plans to sell as many as 15,000 vehicles in 2023, according to the company.
Commenting on the significance of a foreign automaker launching EV production in Russia, Tim Urquhart, Principal Analyst, Automotive, at IHS Markit, said that the move would be a bold one, given the fact that Russia doesn't have incentives for EVs, or infrastructure for massive EV penetration on its market.
"However, it is likely that the announcement will dovetail with some kind of government commitment to support EV infrastructure growth and customer take-up," Urquhart noted.
According to the analyst, the foreign manufacturer in question could be France's Renault, thanks to its links to the Russian government via the ownership of the AvtoVAZ car making group. On the other hand, Hyundai-which is the second largest-selling carmaking group in the Russian market-has many EVs in its offering, Urquhart said.
Russia, however, has very few EVs, considering its huge territory and population, so "it will take some time before EV's gain any kind of real traction in the market," Urquhart says.
Russia had just 3,600 electric vehicles as of January 2019, IHS Markit said earlier this year, quoting analytics from Autostat.
"There is very little demand for EVs in Russia as there are no government support programmes for their purchase, while infrastructure is also currently highly patchy," IHS's Urquhart said in April.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More