When will the production of electric vehicles begin in Azerbaijan?

With intentions set on the culmination of 2023, a total of 28,000 domestically crafted "Togg T10X" electric vehicles are anticipated to be rolled out in Turkey. This disclosure came from Mehmet Fatih Kacır, Turkey's Minister of Industry and Technology. According to Kacır, the first national electric vehicle found its way to 909 owners during the initial half of August. The production of these vehicles commenced in 2022 within Turkey.

Conversely, in Azerbaijan, announcements were made back in 2020 regarding the commencement of electric and hybrid vehicle manufacturing. Niyazi Səfərov, the former deputy minister of economy, had noted that discussions were ongoing with both domestic and foreign businessmen in this regard.

Towards the end of this year's March, the Cabinet of Ministers imposed a ban on importing small vehicles aged over 10 years into Azerbaijan. Following this decision, the country observed a noticeable uptick in vehicle prices. While the import of hybrid and electric vehicles into the country is exempt from taxes, it is said that these vehicles are still priced higher due to their manufacturing costs in the producer countries.

Data from the State Customs Committee reveals that a total of 56,700 transportation vehicles were imported into the country during the months of January to July. This statistic stands as a 37.2% increase compared to the same period in 2022. Out of these imports, only 20.7% (8,400) were hybrid vehicles, and 6.8% (1,492) were electric motor-driven cars.

Reports from the Ministry of Economy suggest that local manufacturers engaged in automobile production are currently in discussions with foreign investors regarding the production of both hybrid and electric vehicles. The ministry informed Turan that "after reaching a certain level in terms of quantity and quality of automobile production in our country, the matter of producing hybrid and electric vehicles can be considered."

Economist Natiq Cəfərli, however, expressed to Azadlıq Radio that the production of national hybrid and electric vehicles is currently not feasible in Azerbaijan. He mentioned that only assembly might be possible, as at least 25% of the components and spare parts for automobile production should be manufactured within the same country.

Pointing to Turkey as an example, Cəfərli noted that there, 40-45% of components for certain vehicles and even up to 50% for others are domestically produced. "That's why they are engaged in production in Turkey, whereas in Azerbaijan there is a lack of infrastructure, technical equipment, and skilled engineers for this purpose. In short, Azerbaijan cannot produce cars under its own name in the near future."

However, according to the expert, considering the availability of labor and certain raw materials within the country, Azerbaijan could potentially collaborate with some countries to establish an institution for automobile production. "Yet, this is a process that demands substantial investment. Therefore, I doubt that there will be any decisions in this regard in the near future. It's possible that there could be a project to assemble around 300-500 vehicles, which wouldn't bring any significant economic or social benefits."