Zeekr's sales jump as Chinese dominate Russian EV market
Corrects paragraph 19 to make clear that Zeekr listed on the NYSE, not on Nasdaq, in May
Chinese brands now make up over half of car sales in Russia
Zeekr dominates EV sector despite lacking official presence
Lack of charging stations, plentiful oil hinder EV market growth
Electric cars still account for less than 2% of Russian market
By Gleb Stolyarov and Alexander Marrow
MOSCOW, June 27 (Reuters) -Sales of Zeekr electric vehicles have shot up in Russia in the last year, putting Chinese carmakers ahead of local competition in Russia's small but rapidly expanding electric vehicle (EV) sector.
Chinese carmakers have already seized more than half of Russia's car market since Western competitors pulled out, taking their technology and know-how with them, after Moscow sent troops into Ukraine in February 2022.
Governments in Europe and the United States are growing increasingly wary of Chinese dominance in the EV sector but Russia, rather than imposing tariffs, is embracing Chinese brands across all automobile sectorsto prop up its car industry.
From May 2023 to April 2024, more than 20,500 new EVs were sold in Russia, a jump of about 350% on the previous year, with Chinese brands accounting for over half of sales, according to data from the Russian analytical agency Autostat.
Russian carmakers sold fewer than 4,000 new EVs in that time, while 1.28 million passenger cars were sold overall.
The EV market's development has been hamstrung by a lack of charging infrastructure across Russia's vast territory, and Moscow's traditional reliance on its plentiful oil and gas resources. Still, more EVs sold in the last 12 months than in the entire decade before.
PREMIUM BRAND LEADS EV SALES IN RUSSIA
Zeekr ZK.N, a Chinese premium brand, is leading the charge despite having no official representation in Russia, with more than 8,000 cars sold since June last year, according to Irina Frank, head of the Frank-Auto dealership in Moscow.
Russians are becoming more interested in EVs as more charging stations are built, consumers understand the savings on fuel, and dealers improve maintenance, Frank said.
"In China, more than 30% of people use electric cars. For us it is still less than 2%," Frank said.
"My opinion is that we will reach more than 25% by 2035."
Zeekr's official entry into the Russian market would boost growth, said Vadim Merzlikin, marketing director for 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 wealthier than the average Russian, with premium cars the only widely available category of EV. As many as 40% of EV owners have charging facilities at home, Merzlikin said.
The Zeekr X, a compact SUV, is on sale from around 4 million roubles ($46,136), similar to prices in Europe.
Russia's Evolute i-Space, a comparable model made by private firm Motorinvest, costs 3 million roubles. The Moskvich 3e, part of Russia's attempt to revive and modernise a Soviet-era classic, is just over 3 million roubles.
The Lada e-Largus from Russia's leading carmaker Avtovaz is still in development and likely to be a more affordable option, though prices have not yet been announced.
CHINESE PREJUDICE FADING
Zeekr is owned by Geely 0175.HK, which also owns the Volvo, Polestar and Lotus brands, and builds its Swedish-designed cars in China. Zeekr listed on the New York Stock Exchangein May with a valuation of around $6.8 billion.
In a statement, it said it had not entered the Russian market and had no approved sales network there.
"(The) very few vehicles being seen there is attributable to individual behaviours," it said.
"Zeekr has not deployed any infrastructure such as charging stations, or conducted any other related business in Russia, hence we are unable to provide basic maintenance service, warranty or remote support in Russia for vehicles sold through unapproved channels."
Even with a standoffish approach to Russia, Zeekr is beginning to dominate. Only around 2,000 Evolute EVs and 1,000 Moskvich EVs were sold in the last 12 months.
And even the Moskvich, though listed as Russian in the statistics, is actually being assembled in Moscow with kits from a Chinese partner.
Maxim Sokolov, head of Avtovaz, in March urged the state to protect the domestic market from all Chinese carmakers, whether electric or fossil fuel-powered.
"Chinese brands have conquered our Russian market very quickly," he said, "replacing the departing Japanese, Koreans, Germans, Americans and French."
China's share of the Russian market has leapt from less than 10% to more than 50% in the two years since the start of the full-blown Ukraine conflict, and prejudice towards Chinese cars is gradually fading.
"There are problems, for example, with service," said Ruslan, the owner of a Chery, China's most exported brand, who declined to give his surname.
"There are not many dealers, there are not many unofficial dealers either, and not all car services know how to work with Chinese cars yet. But I think in three to five years, everything will be fine."
Citing an Autostat and Auto Mail survey, Merzlikin said 53.1% of Russians were now prepared in principle to buy a Chinese car, up from 6.4% in 2017:
"The more Chinese cars are bought, the more ambassadors there are of the Celestial Empire."
($1 = 86.7000 roubles)
Reporting by Reuters TV in Moscow, Gleb Stolyarov and Alexander Marrow; additional reporting by Vladimir Soldatkin in Moscow and Zoey Zhang in Shanghai; Writing by Alexander Marrow; Editing by Kevin Liffey
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