Gleb Stolyarov and Alexander Marrow
MOSCOW (Reuters) – Sales of Zeekr electric vehicles in Russia soared last year, allowing Chinese automakers to leapfrog local rivals in Russia’s small but booming electric vehicle (EV) sector.
Chinese automakers have already captured more than half of the Russian car market since Western rivals pulled out, taking their technology and know-how with them, after Moscow sent troops into Ukraine in February 2022.
Governments in Europe and the US are increasingly wary of China’s dominance in the electric vehicle sector, but Russia, rather than imposing tariffs, is using Chinese brands across all auto sectors to bolster its auto industry.
More than 20,500 new electric vehicles were sold in Russia from May 2023 to April 2024, up about 350% from the previous year, with Chinese brands accounting for more than half of sales, according to Russian analytics agency Autostat.
During this time, Russian automakers sold less than 4,000 new electric vehicles, and a total of 1.28 million passenger cars were sold.
The development of the electric vehicle market is hampered by the lack of charging infrastructure across Russia’s vast territory, as well as Moscow’s traditional dependence on its rich oil and gas resources. However, more electric vehicles have been sold in the past 12 months than in the entire decade prior.
PREMIUM BRAND LEADING SALES OF ELECTRIC VEHICLES IN RUSSIA
Zeekr, a Chinese premium brand, is leading the way despite having no official presence in Russia, with more than 8,000 cars sold since June last year, according to Irina Frank, head of the Moscow dealership Frank-Auto.
Russians are becoming more interested in electric vehicles as more charging stations are built, consumers realize fuel savings and dealers improve maintenance, Frank said.
“In China, more than 30% of people use electric cars. For us it’s still less than 2%,” Frank said.
“I believe we will reach over 25% by 2035.”
Zeekr’s official entry into the Russian market will boost growth, said Vadim Merzlikin, director of marketing at a dealership that sells Zeekr models, but macroeconomic factors are also key.
“It all depends on purchasing power, competition and the economic situation,” Merzlikin said.
Most buyers are richer than the average Russian, and premium cars are the only widely available category of electric vehicles. According to Merzlikin, about 40% of electric vehicle owners have chargers at home.
The Zeekr X compact SUV retails for around 4 million rubles ($46,136), which is in line with prices in Europe.
The Russian Evolute i-Space, a similar model produced by the private firm Motorinvest, costs 3 million rubles. Part of Russia’s attempt to revive and modernize a Soviet-era classic, the Moskvich 3e costs just over 3 million rubles.
The Lada e-Largus from leading Russian automaker Avtovaz is still in development and is likely to be a more affordable option, although prices have yet to be announced.
CHINESE PREJUDICES DISAPPEAR
Zeekr is owned by Geely, which also owns the Volvo (OTC:), Polestar (NASDAQ:) and Lotus brands, and produces Swedish-designed cars in China. In May, Zeekr was listed on the New York Stock Exchange with a valuation of about $6.8 billion.
The company said in a statement that it has not entered the Russian market and does not have an approved sales network there.
“The fact that very few vehicles were seen there is due to individual behavior,” the report said.
“Zeekr has not deployed any infrastructure, such as charging stations, or conducted any other related activities in Russia, so we cannot provide basic maintenance, warranty or remote support in Russia for vehicles sold through unapproved channels.”
Even with his reserved approach to Russia, Zikr begins to dominate. Over the past 12 months, only about 2,000 Evolute electric vehicles and 1,000 Moskvich electric vehicles have been sold.
And even Moskvich, although listed in statistics as Russian, is actually assembled in Moscow from kits from a Chinese partner.
Maxim Sokolov, head of AvtoVAZ, in March called on the state to protect the domestic market from all Chinese automakers, whether electric or fossil fuel-powered.
“Chinese brands very quickly conquered our Russian market,” he said, “replacing the departing Japanese, Koreans, Germans, Americans and French.”
China’s share of the Russian market has jumped from less than 10% to more than 50% in the two years since the full-scale conflict in Ukraine began, and prejudice against Chinese cars is gradually disappearing.
“There are problems, for example, with service,” said Ruslan, the owner of Chery, China’s most exported brand, who declined to give his last name.
“There are not many dealers, there are not many unofficial dealers either, and not all car repair shops are yet able to work with Chinese cars. But I think that in three to five years everything will be fine.”
Referring to a survey by Autostat and Autopost, Merzlikin said that 53.1% of Russians are now, in principle, ready to buy a Chinese car, compared to 6.4% in 2017:
“The more Chinese cars are bought, the more ambassadors of the Celestial Empire there are.”
($1 = 86.7000 rubles)
(This story has been corrected to clarify that Zeekr was listed on the NYSE, not the Nasdaq, in May, at item 19)