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November 11, 2020 06:13 AM

Poland bets on electric cars to boost domestic suppliers

Reuters
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    Reuters/ElectroMobility Poland S.A./Pawel Tomaszek

    Italy's Torino Design has done the styling for ElectroMobility's prototypes. The German news site Deutsche Welle said that ElectroMobility was in talks with VW,Toyota and Hyundai over their EV-optimized architectures.

    WARSAW -- For air filter maker PZL Sedziszow, Poland's ambitious plan to produce electric vehicles from scratch could be the catalyst that helps domestic suppliers catch up with foreign rivals.

    State-owned ElectroMobility Poland has unveiled prototypes for the Izera SUV and hatchback, two electric models aimed at the budget market which it plans to launch in 2023.

    PZL Sedziszow started making battery packs two years ago and believes the government's 5 billion-zloty ($1.3 billion) plan to build the two models will attract more global automakers to the market.

    "Only new mobility can really boost car production in Poland," owner and Chairman Adam Sikorski told Reuters.

    "If the manufacturers see there are sufficient and reliable suppliers of electric car parts in Poland, they will be more willing to place assembly plants in Poland."

    Auto parts manufacturing accounts for 11 percent of industrial production and 4 percent of gross domestic product in Poland, far less than in Slovakia, Hungary and the Czech Republic, where the sector accounts for more than a third of industrial output.

    But Warsaw believes the switch from combustion-engine vehicles to EVs could provide an opportunity to close the gap.

    Climate Minister Michal Kurtyka predicted Poles would embrace a national car brand, and its success could raise the international profile of the country's suppliers.

    "We have a chance to add an additional boost to this ecosystem which already exists," he told Reuters.

    Even if project doesn't succeed, it could still provide a boost to the components sector.

    "It is difficult to produce a car from scratch and equally difficult to do it in big volumes," PwC CEE automotive industry leader Jens Horning said. "But this will attract innovation and new technology in the supplier space."

    The German news site Deutsche Welle said that ElectroMobility Poland was in talks with Volkswagen over its MEB platform, as well as with Toyota and Hyundai for their EV-optimized architectures.

    Italy's Torino Design has done the styling for ElectroMobility's prototypes. The German news site Deutsche Welle said that ElectroMobility was in talks with Volkswagen over its MEB platform, as well as with Toyota and Hyundai for their EV-optimized architectures.

    FOCUS ON ELECTRIFICATION NEWSLETTER: A monthly wrap-up of the latest electric vehicle news, including interviews and global EV sales data, delivered to your inbox.
    Risky bet

    Government efforts to kick start car industries have a patchy history at best, with Britain's attempts to help DeLorean establish a supercar business in the 1980s proving a costly and embarrassing failure.

    Global automakers with decades of experience are already churning out electric models, and the pressure on Poland's public finances from the COVID-19 pandemic raises questions over how much money it will be prepared to put behind the plan.

    However, advances in computing and software have lowered engineering barriers to entry into the auto sector, allowing Germany's Deutsche Post, for example, to develop its own electric delivery van, the StreetScooter, from scratch.

    And to lessen the risk, Poland will license the manufacturing platform from a foreign partner, Piotr Zaremba, head of ElectroMobility Poland, told Reuters.

    He declined to name the partner but said it was an automaker that has brought about 20 new vehicles to market in the past five years.

    Volkswagen Group has said it plans to license its MEB electric platform and has already struck a deal with Ford.

    VW declined to comment for this story.

    "We are not building the platform from scratch because it is too big a risk, from a technical and business perspective," Zaremba said. "So, at every stage we try to reduce the risk by using tested solutions."

    Starting at a small scale will allow Polish suppliers to grow alongside the project, building their competitive strength, which will also help them in foreign markets, he said.

    A highly skilled, but relatively low cost, workforce has helped to turn the Czech Republic, Slovakia and Hungary into investment and production hubs for global car brands such as VW, Audi, Mercedes-Benz and Kia, among others.

    Poland has lagged but believes the switch to electric mobility has created a new opportunity.

    It has already used generous incentives to attract Asian battery suppliers such as LG Chem and Guotai Huarong to strengthen its position in the industry.

    Under pressure to reduce emissions, the government said in 2016 it wanted to have one million electric vehicles on the road by 2025. At about 15,000 currently, that looks a long shot, but officials hope growing interest in electric cars will help fuel demand for the Izera models.

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