Russian Electric Vehicle Market to Double

Russian drivers bought about 800 battery EVs in the first half of 2021, which was still a sevenfold increase from the same period in 2020. Full-year sales for 2020 were 720 units, up from 353 in 2019. Russia’s EV fleet amounted to 10,836 units of all kinds at the end of 2020.

A domestically produced micro EV called Zetta is expected to roll off the production line by year end. Until then, there is no domestic EV production, making it a completely import market.

“This is an inchoate market, it is spontaneous and independent because there are no government incentives,” Viktor Pushkarev, senior analyst in Autostat, told Electric Vehicles InSite. Pushkarev attributes the growth spurt to an import duty waiver in May 2020, which ends at the end of 2021.

“We expect reintroduction of the 15% import duty from January 2022 onwards,” Pushkarev said.

In August, the government announced it was drafting an incentive package to stimulate vehicle and battery development, recharging infrastructure and sales. The package includes co-financing plant construction, as well as €8.6 billion of investment in battery and fuel cell vehicle development. Drivers will enjoy toll exemptions and EVs will be included in concessionary loan and leasing schemes, according to EV website Electrive. Autostat expects that if the package is passed, the first tangible results will be seen in 2023.

Despite Russia’s reliance on income from hydrocarbons exports, the country will have to accept the reality of a world changing to e-mobility, according to a comment by an Economy Ministry spokesperson reported by Reuters.

Russia’s EV fleet comprises imported high-end cars, such as Audi, Porsche and Tesla. Sales of internal combustion engine vehicles in the country are expected to stabilize after the pandemic, but as major carmakers head toward full fleet electrification, the flow of imported mid-range ICE vehicles could dwindle.

Artem Mazaev, a Moscow-based consultant in the automotive lubricant industry, told Electric Vehicles InSite that the main drivers of EV proliferation in Russia will be ecological standards imposed by the government, rising incomes, a range of at least 500 kilometers and development of charging infrastructure. Mazaev thinks this is all achievable but is contingent on state support.

“It looks like the EV sales success story by far … depends on the government’s initiatives to provide tax benefits for battery makers and EV producers and investments to expand the electric utility networks for more accessible recharging options,” Mazaev said.

The EVs are yet to be a significant threat to the lubricants industry globally, even as lubricant demand has leveled off in the past few years, thinks Mazaev.

“Mature markets such as Europe and the U.S. reached their peak in new car sales and are now stabilized. As a result, lubricant consumption has followed that trend and is not growing in sales volume,” Mazaev said.

The EU and China lead as the world’s largest markets for new EV sales, followed by the U.S.

“Indeed, new EV sales show optimistic results in China and Europe, while the American automobile market still remains occupied by the internal combustion engine technology, and would stay as a save heaven for the lubricant industry in a foreseeable future,” Mazaev said.