Will Poland finally go electric?
The wheels of the e-mobility movement in Poland have begun to roll, but is there enough power in the engine through subsidies and investment to build on this momentum?
Poland has grand ambitions for e-mobility and now the legislation is in place to help the country realise its goals. Until recently, however, the local market lacked sufficient incentives for e-mobility uptake, which, as research and experience have shown, is the prerequisite of rapid market growth. All this could change thanks to a subsidy scheme that is due to be rolled out this year.
After the Parliamentary Elections in 2015, Prime Minister Morawiecki hailed e-mobility as the first industrial revolution in which Poland could participate as a leader and not as a technology buyer. He hoped that it could be a springboard for Polish companies to become important global players, in particular in electric bus manufacturing. To enable the dawn of Polish e-mobility, legislation was swiftly passed. It set goals for central and local authorities to buy electric vehicles (EVs) and buses. It also imposed obligations on the cities to build the required public charging infrastructure. The usual building permits and electricity licensing procedures were removed to speed up the infrastructure rollout.
Still, investing in charging infrastructure is not all plain sailing. Some new red tape was introduced as the Office of Technical Inspection (Urząd Dozoru Technicznego: UDT) acquired new powers to certify every public charger. As a result, investors sometimes have to wait more than 18 months to be connected to the electricity grid. It was mainly for this reason that the total deployment of new charging points in 2019 was less than expected, bringing the total of public charging points to 976. Although ahead of Hungary (720) and Slovakia (589), this total figure still puts Poland behind many other EU counterparts, from the Czech Republic (1,135) and Denmark (2,707) to the EU leaders of Spain (8,622), the UK (27,204), France (29,648), Germany (39,922) and the Netherlands (50,466).
The first development stage of the EV market was facilitated by the introduction of a number of subsidies and incentives. New EVs are exempt from excise duty amounting to 3.1%. Owners of electric cars enjoy free parking in toll areas and are given access to dedicated bus lanes, allowing them to fly past other motorists stuck in traffic. Now, after the initial promise was floated in 2016, the direct subsidy programme for the purchase of EVs is finally taking shape.
The subsidy scheme was initially designed as one of the most generous in Europe. Every purchase on a new electric car with a price lower than ca. €30,000 is meant to attract a subsidy of up to €8,500. The government has now announced that the system is about to launch, although with substantially reduced subsidies. The market speculates that grants to buy EVs could be cut by half, making them significantly less generous before the system has even started.
Yet the introduction of an additional price incentive, even a moderate one, could be a boon to a market frozen for almost three years by the promise of direct grants from the national government, which most markets in Europe and beyond already enjoy. The current fleet of 5000 EVs registered on Polish roads needs every little help, especially if the country still aspires to reach the target of 1 million registered EVs by 2025 as per the Ministry of Energy’s predictions.
Building e-mobility, one battery at a time
In its push to electrify transport in Poland, the government did not only focus on infrastructure and sales. The Prime Minister’s plans also included the development of a new state-owned company tasked with design, manufacturing and the sale of a new Polish brand of electric vehicle. This company, ElectroMobility Poland, was formed in 2016 as a joint venture between four state-owned power companies, PGE Group, Energa SA, Enea SA and Tauron Polska Energia SA. The first prototypes are expected to be unveiled in 2020 and according to the company, the first cars should roll off the assembly line in 2023. Government officials have also announced that the factory, whose location is yet to be disclosed, will have a production capacity of 100,000 units per year.
Although most experts remain sceptical about the business case for a state-sponsored, Polish-built EV, another segment of the e-mobility industry is booming. Poland is the home of the largest electric bus manufacturer in Europe, Solaris Bus & Coach. Headquartered in Owińska, north of Poznań, the company coasted to the top of the producers’ pile, securing the biggest EV order of 2019 in Europe. It will supply 130 electric buses to the city of Warsaw, which is in the process of ‘greening’ its bus fleet. But Solaris is not the only bus manufacturer operating in Poland. Volvo, Scania, MAN Truck & Bus and a Polish newcomer, RAFAKO, all produce or intend to produce electric buses here.
An important and strategic part of the e-mobility value chain is the manufacturing of battery cells. Poland features prominently on the map of global leaders in this field as it hosts one of the largest lithium-ion battery factories in Europe, which is being built and operated by LG Chem. The plant is under constant construction as it tries to keep up with the expanding demand for EVs in Europe. With a planned capacity to reach 70 GWh a year by 2022, the plant is set to supply batteries for up to 1 million EVs per year.
The number of EVs zipping around Polish roads may not be impressive and the charging infrastructure is still in its nascent stage, but the electric engine of the Polish economy is humming along fairly well. The local battery manufacturing industry is growing, with healthy demand from the European automotive sector. Electric buses are fast becoming a signature export product for Poland. The last unconquered segment is the passenger car market. So far Polish drivers have not fallen in love with battery propulsion, but will financial aid change that attitude? Let’s hope. If only for the sake of improving the air quality in Polish cities.
Krzysztof Bolesta, an economist and international e-mobility expert, is the Vice President of the Electric Vehicles Promotion Foundation (Fundacja Promocji Pojazdów Elektrycznych: FPPE). From 2012-2015, he was a member of the cabinet of the Minister of the Environment as an energy and climate advisor. Since 2008 he has been in the Directorate-General for Energy, where he deals with coal and oil markets, CCS technology, emissions trading systems and energy infrastructure.
He will be a keynote speaker at the 2nd Urban E-Mobility Forum 2020 in Gdynia to be held on 5-6 October. The event is co-organised by the foundation and Poland Today.