Russia lifts zero import duty on electric vehicles in favor of its own production

Russia decided to cancel the "privileges" on the import of electric vehicles, and from January 1, the government returned 15% of the import duty.

Other member states of the Eurasian Economic Union (EAEU) such as Armenia, Belarus, Kazakhstan and Kyrgyzstan are likely to introduce a similar duty.

Earlier, Belarus offered to extend it until the end of 2023, but Russia rejected this proposal because it fears that this incentive will hinder the development of its own production of electric vehicles.

Last year, the Russian authorities approved a new concept for the development of road electric transport in Russia until 2030. By 2024, Russia, which will not mass-produce electric vehicles, but only prototype cars or test versions, is expected to produce at least 25,000 electric vehicles by 2024. By 2030, production should account for 10% of the total volume of cars.

According to the Association of European Businesses (AEB), sales of electric vehicles in Russia continued to grow massively in January-October. New electric vehicle sales increased to 845 units, up 118% year-over-year and 16% year-over-year. In October alone, 135 electric vehicles were sold.

However, the AEB warns that the positive momentum in electric vehicle sales could be undermined by the government's refusal to extend the zero import duty.

“This will lead to higher prices for electric vehicles, lower consumer demand and subsequent stagnation in sales dynamics,” the statement said. “In addition, some manufacturers may postpone the introduction of their electric vehicles to the Russian market due to higher costs due to lower-than-expected sales of electric vehicles.”

Large foreign manufacturers of electric vehicles were preparing to sell serial electric vehicles to Russia in 2022.

Earlier, the Russian authorities once again confirmed plans for the production of electric vehicles of three brands in the country: Zetta, Kama and the Motorinvest project. Production should be launched in the next 2-3 years.