“Unit sales” threat industry and Trade Ministry plans to arrange Mechanism for electric vehicle manufacturers in Russia to access programs that will increase demand for them. It is planned that hitting them will depend on the localization level of the vehicles. Oleg Moseev, the founder of the...
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“It is easier to close this project”: Assembly of Evolute electric cars may be stopped Autoexpert Moseev: Evolute may close if localization becomes stricter 06/04/2024, 20:22
By
ANIKA
June 5, 2024
“Unit sales” threat
industry and Trade Ministry
plans to arrange Mechanism for electric vehicle manufacturers in Russia to access programs that will increase demand for them. It is planned that hitting them will depend on the localization level of the vehicles.
Oleg Moseev, the founder of the Automarketer project, believes that in such cases, the Motorinvest company, which assembles Evolute cars from Chinese auto kits at a plant in the Lipetsk region, may face a halt in production:
“If the program is tightened, Motorinvest will not comply yet. The only thing is that they are currently testing a domestically produced battery, which greatly simplifies the story. Evolute already sells a little bit, if the prices go even higher then there will generally be parts sales.”
According to the expert, Continuing production of the Evolute with minimal sales only makes sense if it’s a long-term projectand Evolute believes it will reach full production.
“Then we need to wait and be patient. We are definitely not talking about a year. If Evolute loses state support, it seems that it will be easier to close this project, but the question is whether Motorinvest will be ready to write off investments or invest more,” Moseev shared his thoughts.
“Difficult to implement” task
According to the founder of the Automarketer project, Russian-made batteries can be used by other companies, as well as electric motors, but it makes no sense to localize the production of parts for all other cars.
“It all depends on how strict the Ministry of Industry and Trade’s rules will be. If there is a need to localize a significant part of the car, it will be easier to close the factory and import the cars,” Moseev concluded.
According to Maxim Kadakov, editor-in-chief of Za Rulem magazine, it will be more difficult for Motorinvest to localize the production of Evolute cars with its wide model range than for Moskvich, which is maximally unified in terms of its electric and gasoline crossovers. from body parts.
“This is a common business situation to consider; what a company assembling cars using the SKD method has to gain, what to lose. Motorinvest has the same situation as Moskvich, but the only difference is that Moskvich has started welding and painting bodies, which adds more provides value,” Kadakov explained to socialbites.ca.
According to him, Motorinvest theoretically has the potential and production capacity, but it is clear that this cannot be done with “short shoulders”. For example, welding and painting Moskvich bodies took more than a year, but their components are still imported.
“Localization of production requires investment. To localize something you need to invest. And all this needs to be divided by the production volume. They could potentially be localized, but we don’t know how they would act. “We also do not know for sure the agreements between Motorinvest and the state,” he emphasized.
He explained that the localization of Evolute in Russia can be considered only in terms of expectations and only in the hope that there will be an increase in sales, including government purchases, for which Russian electric cars are prescribed, but equally success state institutions can purchase gasoline cars.
“This is a multi-vector task and very difficult to implement,” summarized the editor-in-chief of “Behind the Wheel”.
“Out of Work Story”
Igor Morzharetto, partner of the analytical agency Autostat, noted that localization of a car in the country becomes profitable with a production volume of one model of 30 thousand cars per year, which is still unattainable when producing electric vehicles in Russia.
“It all depends on the frame of reference and how to construct it. “If we say that all parts must be assembled in Russia, all assembly enterprises will stop, because localization in Russia with existing volumes is technically unprofitable,” the expert said.
If the Ministry of Industry and Trade realizes that what is needed is not the pursuit of numbers, but a series of developments, they will probably create a system that will take into account phased localization, research and development work, so that all these “young” projects can develop normally.
“The electric vehicle market in Russia is growing, but from a very low base. Morzharetto concluded: “I can’t say it’s very promising.”
Electric vehicles on the Russian market have no future in the next 5-10 years, especially if their prices continue to rise, says IT entrepreneur and auto market expert Alexander Usoltsev.
“The share of electric vehicles in Russia today is so small that this does not seem to be a very useful story. Usoltsev stated that electric cars produced in Russia are not competitive in terms of price and definitely cannot meet expectations.
socialbites.ca sent questions to the Ministry of Industry and Trade and Motorinvest about the prospects for further assembly of Evolute and its possible discontinuation if localization requirements are introduced. There was no response from editors at the time of publication.
Experts interviewed by socialbites.ca said that the Evolute electric car assembly may face closure if the Ministry of Industry and Trade imposes requirements for localization of electric vehicles to provide access to state subsidies. According to them, high localization can only be achieved through large-scale long-term investments, but it is “technically unprofitable” due to the current market situation.
Source: Gazeta
