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Michael Resnick: "Without the state support we won’t have electric vehicles in Ukraine. Even Tesla is loss-making ...."

Michael Resnick: "Without the state support we won’t have electric vehicles in Ukraine. Even Tesla is loss-making ...."As is well known, although Ukrainian automotive industry lags behind the world's largest companies, but potentially the country have the capacities to produce the components for a national electric vehicle’s creation. Such programs are needed to ensure that domestic producers have found their niche without giving it to imports. What we need for that? It will be clear from an exclusive comment for "Vector News" delivered by the President of Ukraine Automobile Manufacturers Association "Ukravtoprom" Michael Resnick.

— Mikhail Borisovich, please tell us, how do you see the future of electric cars in Ukraine?

— With regard to electric vehicles, it is quite difficult develop actively this segment of the market without the attention and participation of the State.

Not so long ago, this issue was discussed in the framework of the World Organization of Automobile Manufacturers. My colleagues, representatives of national associations, shared their experiences and "recipes" of green technologies in the automotive industry and the promotion of ecomobiles’ markets.

Generalizing the result of inter-ethnic dialogue on this subject, it comes down to the need for close cooperation of the state and business. Good results are shown by those countries where the authorities create conditions for the development of the production of such a highly innovative product as electric cars and effectively financially motivate motorists to change to use an expensive environmental transport.

Only the total state support at all stages of circulation with electric vehicles — from sale to the ownership and exploitation — allows a country like Norway to demonstrate the world's highest rate share of these vehicles in the domestic sales of new passenger cars, which is about 6 percent.

For France the figure is close to 1% and in Japan and the US it amounts to 0.5 per cent.

In fact, at this stage only the companies with a high stock of financial strength, or a serious external support can afford the engagement in the production of electric cars. For example, a company like Tesla is one of the world's fashion leaders and lawmakers in the production of electric vehicles. And it has not reached yet the break-even production of its vehicles. Given the current situation, it is obvious that the topic of electric vehicles is certainly promising for Ukrainian car market, but not yet a priority for it.

— In such a case, the next question will be more global. How high is the share of the national car industry in the structure of the Ukrainian economy? Do we need Ukrainian cars and are there the prospects of cooperation with international manufacturers?

— Countries that create and develop a car production, not only provide employment and economic growth of the population, but also provide a guarantee to consumers against unjustified price increases, against goods deficit and, in the end, against the depreciation of incomes.

Indeed, the main factor in the depreciation of the national currency is the balance of payments of the country, in which the foreign trade balance takes an important part. The stronger imports dominate exports, the larger devaluation is, the national currency is exposed at risk. Hence, the purchasing power of citizens and their well-being is exposed to risks as well.

And in the Ukrainian imports cars have always been in the first positions, forming a deficit of foreign trade turnover. Only by developing the production of durable goods, which tend to be high-tech products with high added value, we can achieved significant decrease in the outflow of currency from the country, thereby reducing the pressure on the national monetary system.

A country with a population of over 40 million people a priori can not be successful without a developed industry, without the production of durable goods, including, first of all, different types of vehicles. Highly localized automobiles’ construction is able to perform not only a weighty component in the import substitution, but also serve as a capacious consumer of skilled labor and the products of other industries.

Ukraine has a huge potential of industrial development: we have an educated population, trained workers and engineering staff, convenient logistics for the external supply. With such a foundation, even the question of the national auto industry value should not occur. The only question that should be on the agenda is how to create an investment climate with the highest possible competitive advantages.

According to the World organization of automakers the world demand for cars will grow by more than 20 mln units per year in the nearest future. This will occur against the background of the revival of the old world markets.

That is, the eastern vector of investment in car production will "fade". The next stage of development of the global automobile industry will be the output of Asian products to the European and Eurasian markets. This reverse wave of investment is a real chance for the Ukrainian automobile industry. In addition, the EU association also creates certain opportunities for the creation of partnerships with European manufacturers. And this is again a question of an attractive investment climate in the industry.

Interviewed by Sergey Kozlov
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