Development of electric cars should be driven by market demand

19 october 2016

In August, the Deputy Chair of the Russian Government Arkady Dvorkovich instructed the country’s ministries and government agencies to develop a set of technological and economic incentives for the manufacturers and consumers of electric vehicles. Experts point out that given the scale of the announced plans it is important to understand who is going to develop the requisite infrastructure for electric vehicles in Russia - after all, all the success stories about the development of environmentally friendly transport in other countries have involved the state making it the job of major energy companies to develop the required infrastructure. It was the development of infrastructure for electric vehicles that was discussed at the round table that the Analytical Center and Russian Grids held as part of the business program of the international electric power forum Rugrids-Electro-2016.

“The market for electric vehicles is going to grow every year but even if the market keeps growing, it will not necessarily bring about the emergency of the electric transport segment by default. An integrated approach is needed, both demand and technologies that make progress possible are important. In this context, the role of the state is paramount both in supporting the development of infrastructure and in promoting demand,” believes the Deputy Head of the Analytical Center Gleb Pokatovich. At the same time, Russia’s Ministry of Industry and Trade is moving in the right direction: the draft program for the development of electric transport aims to bring together all the key ideas and industry development goals, the expert believes.

As for international experience, sure state plays a big role there but that role is different in every country, Mr. Pokatovich noted. “For example, China can afford to commit to long term investments. In 2010 the country had some 100 charging stations, roughly the same amount that Russia has today. By late 2014 China already had 780 charging stations and 31 thousand charging points. Today, they already have an intercity chain of fast electric vehicle charging points on controlled access highways where they have built 133 stations that cover 2,900 km of roads. It is the world’s largest public chain of fast charging stations. In China, sales of electric vehicles have already exceeded 100,000 per year, the country is leading both in terms of the number of EVs on the roads and in terms of the number of EVs manufactured,” the analyst said. It is one approach to developing electric transport that focuses on developing the requisite infrastructure that then drives demand for EVs, Mr. Pokatovich explained.

“Another approach is what is happening in Europe where governments cannot afford to invest as much as China can in infrastructure so they rely on big state-owned companies to create localized EV infrastructure,” the expert said. In Italy and in France state companies partnered up with automotive manufacturers to develop chains of charging stations and locally manufactured electric vehicles. At the same time in every country demand for EVs was promoted with an emphasis on localized manufacture, the analyst pointed out. “International experience tells us that state programs, including programs implemented through public private partnerships, is the most effective way to promote electric vehicles,” the expert said.

Mr. Pokatovich also believes that it is important to understand what the demands of business are, specifically, what kinds of vehicles are going to be in demand in the future and whether electric vehicles or internal combustion vehicles running on natural gas should be prioritized. And it is only after there is this understanding that the state should act and support specific market segments.

During the discussion, the experts noted that Russia is already taking some specific and very serious steps towards promoting the development of the industry. For example, the duties on electric vehicles have been reduced and free parking lots for EVs have been opened. But if we want to talk about the prospects of EVs in Russia, then we should learn from the experience of other countries and find our own development model that considers the needs of our domestic market, the discussion participants concluded.