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Slovakia faces challenge of shifting gear into e-cars
BRATISLAVA, Aug 1, 2018 (BSS/AFP) – A small country but ranked as a major
automaker, Slovakia now risks paying a heavy price should it miss out on the
accelerating change to electric cars, analysts say.
Slovakia reinvented its economy twice in recent decades, first after
shedding the communist yoke in 1989 and then again after separation from the
Czech Republic. Low corporate taxes drew foreign investors, primarily in the
electronics and auto sectors.
A skilled workforce and wages that average half those in western Europe
coupled with eurozone membership sweeten the deal.
But analysts say Bratislava could be missing the e-mobility boat by foot-
dragging on fresh incentives to encourage global carmakers to produce
electric cars at their Slovak plants. A risk accentuated this week when BMW
chose neighbouring Hungary for a new billion-euro factory where it will
produce both electric and conventional cars.
Of the three global automakers operating in Slovakia — Germany’s
Volkswagen, France’s PSA and South Korean Kia — so far only VW produces
electric vehicles.
But even VW’s future plans for e-car production in Slovakia remain
unclear, and it is the same story for PSA and Kia.
A new Jaguar Land Rover plant is also due to open in September. Plans call
for 150,000 cars to roll off the assembly line annually but it is unclear
whether any will be electric.
The auto sector generates some 300,000 jobs in Slovakia, making it by far
the largest employer in the country of 5.4 million.
Annual production has exceeded one million cars in each of the last three
years and is forecast to grow by more than a third by 2020.
Overall, the carmaking sector accounts for 44 percent of Slovakia’s total
industrial production and 35 percent of its exports.
– ‘Lack of vision’? –
According to International Energy Agency (IEA) estimates, worldwide
electric vehicle production could explode from three million last year to 220
million by 2030.
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Given such prospects, encouraging e-car production at Slovak plants should
be Bratislava’s number one priority, said Peter Badik, co-founder of
Greenway, the largest electric vehicle charging network in Slovakia and
Poland.
“The opposite is true,” he told AFP. “If we keep ignoring technological
progress and we don’t try to use it in our favour, it could become a huge
problem for Slovakia.”
He is echoed by Peter Sevce, director of the Slovak Electric Vehicle
Association (SEVA), who insists that Bratislava needs to promote production
of e-vehicles, battery management systems and electric engines.
“There’s a lack of political will to deal with electromobility in
Slovakia,” he told AFP, adding that there is also a “lack a vision about
where we see the automotive sector in a couple of years.”
According to VW Slovakia spokesman Michal Ambrovic, the e-up! model, the
carmaker’s “first-ever mass-produced electric vehicle”, began rolling off the
assembly line at its Bratislava plant in 2013.
But Sevce contends that VW’s “other electric models will be assembled in
Germany, due to fears of a fall in employment in the automotive sector.”
Ambrovic declined to comment on this claim. He also refused to disclose
the number of e-up! vehicles VW produces in Bratislava or any future VW plans
for e-car production on Slovak soil.
– ‘Prestige, regulatory concerns’ –
PSA Slovakia is also not forthcoming about its plans regarding e-vehicles.
Spokesman Peter Svec said the carmaker “is preparing for several projects”
at its plant in Trnava, a town around 100 kilometres (60 miles) northeast of
the capital Bratislava.
“At this time, I cannot confirm the details associated with this potential
investment,” he told AFP.
Slovakia’s third carmaker, the Zilina-based Kia, was unavailable for
comment.
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The economy ministry took one of its first small steps in June to promote
domestic purchases of electric vehicles by creating a support scheme worth
3.3 million euros ($3.8 million).
Ministry spokesman Maros Stano told AFP that measures to support the
development of e-car charging stations across Slovakia are also planned.
Martin Vlachynsky, an analyst with the Bratislava-based Institute of
Economic and Social Studies, warned that although lagging behind in
electromobility could prove problematic, “jumping in first can be risky” too.
“Today, e-cars are more of a matter of prestige and regulatory concerns
for automakers, due to emission limits,” he told AFP.
“They are, and for some time will remain loss-making products,” he added.
The expert also insists that decisions on scaling up e-car production
should remain decentralised, at the level of car-makers.
“This will minimise the risk that the state will take a step in the wrong
direction,” Vlachynsky said.
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