Bulgaria’s E-Mobility Dream

By Radomir Ralev

With a total of 12,280 deaths attributable to poor air quality annually,
Bulgaria’s mental problems seem obvious. When it comes to the ratio of deaths relative to population, Bulgaria’s situation is even more desperate, as the country is the indisputable leader in the European Union (EU), with a population-weighted concentration ratio of 24. Bulgaria’s annual mean is the third largest in Europe, after Macedonia with 27.4 and Kosovo with 26.4, according to data of the European Environment Agency.

Bulgaria ranks eighth in Europe in terms of premature deaths attributable to PM2.5, a pollutant stemming from fuel combustion, heating, transportation, waste incineration, agriculture, other anthropogenic sources, the data shows.

The poor air quality in Bulgaria was noticed by the Court of Justice of the European Union, which in April 2017 ruled that the country has failed to fulfil its obligations under EU law to cap dust particles at a certain limit.

Poor air quality sparked protests in the country’s capital Sofia. The environment ministry came up with an analysis showing that the biggest air pollutants in the country are home heating on wood and coal, with a 40% share, and car traffic, with 60%.

One of the measures contemplated by Bulgaria’s environment minister, Neno Dimov, is the elimination of the so-called ecological fee paid at the initial registration of electric vehicles. The owners of old polluting cars will have to pay a much higher ecological fee than they do now, the fee for hybrids will be much lower, while no fee will be imposed on electric vehicles, Dimov said in April.

The development of electric mobility in Bulgaria is still in a very early phase. According to data of the European Automobile Manufacturers’ Association (ACEA) just 64 new electric cars were registered in Bulgaria in the first half of 2018, including 16 in the second quarter. In terms of plug-in hybrid registrations, Bulgaria occupies one of the last places in the EU with only 15 cars in the first half of 2018. The statistics for non-load- able hybrids show a slightly better picture, with 708 units in the first half, up 20.4%. At present, there are about 110 charging stations in Bulgaria and some 600 registered electric cars. “The cars are not the only factor, but they are part of the entire problem,” Stefan Spasov, CEO at electric car rental service provider Spark Bulgaria and charging station infrastructure operator eMobility International, said during a recent conference on the development of electric mobility in Bulgaria. “But the obstacles we face are not so small. Including the fact that there are no tools provided by the state to support what we do,” Spasov said.

To date, eMobility International’s network of charging stations built in partnership with ABB Bulgaria, operates in nine Bulgarian cities and along the roads connecting the capital Sofia with the checkpoints on the borders with Greece and Turkey. eMobility International, which operates under the Eldrive brand, manages charging station infrastructure and offers flexible solutions for short and long-term rental services
of electric vehicles.

INCENTIVES

According to Aleksandar Kostadinov, director of sales and marketing of Moto-Pfohe Bulgaria, the electric mobility development depends on the existence of an accessible network of charging stations, but what matters most is tax relief. “The development of electric mobility is a job of the lawmakers. Sure, infrastructure is needed, but the incentive is the most important,” Kostadinov told SeeNews. The lack of government subsidies for individuals buying electric vehicles is one of the main barriers to the wider use of green cars, he added.

Under the existing regulations, electric vehicles can park free of charge in the designated zones for hourly paid parking in Sofia. However, this advantage is being lost to drivers using electric vehicles for their own travel. Free parking is a plus but the price of the electric car makes it pointless if the car is not registered to a company for business purposes, Kostadinov explained.

Moto-Pfohe is the official dealer and distributor of Ford, Volvo, Jaguar and Land Rover in Bulgaria. “In our mix, the annual sales of the plug-in hybrid versions of the Volvo XC60 and XC90 models stands at between 20% and 30%. This means that the goal of achieving a 20% share of hybrid vehicles in Europe in 2025 is not impossible for Bulgaria,” Kostadinov estimated. However, the government should stimulate this type of mobility, as there is no country in the world where electric mobility is developing well with-out stimuli, he added.

In May 2017, neighbouring Romania doubled the incentives on offer for buyers of plug-in electric vehicles in a bid to help reduce air pollution. The government created the Rabla Plus programme, an update of the earlier Rabla, and is now offering up to 11,000 euro of grants for the purchase of electric vehicles. Rabla Plus also offers buyers of non -plug-in hybrids a grant of up to 1,450 euro. The positive results of the programme are visible. New passenger hybrid electric car registrations in Romania more than doubled to 1,469 in the first nine months of 2017, from 684 in the prior-year period, according to data by ACEA. There were 97 electric battery-powered vehicles registered in Romania in the first nine months of 2017, end-September 2016. Total registrations of alternative fuel vehicles in Romania surged to 1,566 in the nine months through September 2017 from 107 in the year-ago period.

Iliya Levkov, chairman of Bulgaria’s Electric Vehicles Industrial Cluster, considers that a similar systematic and sustainable effort should also be applied by Bulgaria’s institutions in order to encourage the development of electric mobility. “Our neighbouring countries are still timidly advancing on this topic, but Romania last year outpaced us,” Levkov said.

CHARGING STATIONS

However, according to Martin Zaimov, deputy chairman of the Bulgarian Electric Vehicles Association (BAEPS), it is not the economic stimulus that would encourage the growth of the electric vehicle market in Bulgaria but setting limits on the circulation of old vehicles running on petrol and diesel. The provision of grants means taking money from the state, which translates into taking money from all taxpayers and this is not fair to poor people, Zaimov said. “The best stimulus is the launch of more charging stations.”

The lack of sufficient infrastructure was also highlighted by the European Commission which asked Bulgaria and Ro-mania to fully transpose the directive on the deployment of alternative fuels infrastructure EU legislation sets out minimum requirements for the building-up of alternative fuels infrastructure, including recharging points for electric vehicles and refueling points for natural gas and hydrogen.

Sofia is making efforts to boost the appeal of e-mobility to the private sector by drafting a plan for the construction of over 60 electric vehicle charging stations in the city, Sofia mayor Yordanka Fandakova said in March. According to data from Bulgarian website Vsichkotok, a total of 116 chargers are currently active in the country, including about 50 in Sofia.

Moreover, Stolichen Avtotransport, Sofia’s public bus transport company, signed in April 2018 a 22.2 million levs deal with local leasing company Eurolease Auto for the supply of 20 electric buses. Fandakova said in a Facebook post that the 20 electric buses will be delivered by the end of October 2018. According to her post, the buses can run 300 km on a single charge.

GOVERNMENT ACTIONS

But Bulgaria does not stand completely idle when it comes to stimulating electric mobility. In 2015, the National Trust EcoFund (NTEF) launched a scheme to encourage the acquisition of electric vehicles by the public administration. The fund provides fixed grants for different types of vehicles ranging from 10,000 levs to 40,000 levs depending on the vehicle category.

The Fund applies the scheme to the state administration bodies and their territorial divisions, Irena Pencheva, director of NTEF, said. However, the results are disparaging. For a total of five calls so far, financing has been provided for the acquisition of only 21 vehicles, 17 of them electric and four hybrids, according to NTEF data. Bulgarians conservatively look at the initial price and do not realize that the savings generated by these electric cars result in about four to five years of redemption of the vehicle. Another problem is the incapability of municipal structures and their experts to maintain the vehicles,” Pencheva said.

In 2018, the European Parliament revised a directive on the energy performance of buildings including measures to ensure that the buildings’ car parks are increasingly prepared to have charging stations installed so owners can charge their electric vehicles easily. The directive will also require the EU member states to enact regulations on the installation of a minimum number of charging points for all non-residential buildings with more than 20 parking spaces by January 1, 2025. Bulgaria has already transposed the directive into its legislation, obliging the companies de-signing new office buildings to envisage charging points at 10% of the parking places.

SHARING ECONOMY

As the insufficient charging infrastructure nationwide and the too timid government stimulus are keeping the sales of electric vehicles at low levels, what may fill the void is the sharing economy, according to eMobility International’s CEO Stefan Spasov.

“Sharing economy is what we believe in and what can give the electric mobility asset a very affordable price,” Spasov said. That is why the company decided to launch an electric car rental service in Sofia in November 2017, together with its Lithuanian peer UAB Ride share, which operates under the Spark brand.

eMobility International is aiming to offer a total of 250 electric vehicles and have 40,000 active users by the end of 2019. By the end of 2018, Spark Bulgaria will likely have 100 electric vehicles and 10,000 users, a company official said in a video file posted on Spark’s official Facebook page. The service initially started with 25 electric vehicles.

“At the moment we have about 20,000 users, the cars will soon be over 100. The sessions are over 300 a day. People have the opportunity to drive an electric car across Sofia. So far I have not heard of a user who does not say that he or she is extremely pleasantly surprised by driving an electric car. You know the problems in Sofia related to the air pollution. Car sharing is an adequate solution, including to congestion in Sofia,” Spasov said.

It seems that the business model deficiencies in the fossil fuel car industry in the past century are becoming more and more obvious. According to Eurostat data, there were 443 registered cars per 1,000 citizens in Bulgaria in 2016, roughly one car per two residents.

Zaimov believes that rather than buy their own car in the future people are more likely to share and rent them. “It is not reasonable to invest in buying an electric vehicle, but to ‘hire’ it under some form of operational leasing or another form of financing is,” Zaimov said.

In Zaimov’s opinion, the future of urban transport in Sofia includes a smaller number of own cars, but more sharing of vehicles. “In a situation in which the ownership of cars is very small, there would be no parking problems,” Zaimov says and goes even further. “A situation in which, after 10 years, 70% of the people in Sofia do not have their own car is absolutely possible.”

Therefore, according to Spasov, the development of charging stations network and support for the purchase of electric cars should go hand in hand. “The chicken -egg dilemma is not relevant and has never been. If both things do not go together, then nothing will ever happen.”

SEE countries timidly entering e-mobility era

Southeastern Europe (SEE) is in the initial phase of electric mobility adoption, with sales constantly rising but still remaining well below 1% of all motor vehicle sales. According to data of the European Automobile Manufacturers’ Association (ACEA), the market share of electrically chargeable vehicles (ECVs) is practically 0% in countries with annual GDP per capita below 18,000 euro, including the new EU member states in SEE.

Romania had the lowest electric vehicle (EV) market penetration among the EU member states in 2017, with 188 EVs sold or just 0.18% of the total. In Bulgaria, the electric vehicles had a share of 0.3% last year, ACEA said.

However, steps are being taken to expand the market. Croatia’s state-owned energy utility HEP now operates some 50 charging stations and plans to expand the network and establish a system for their remote control and supervision in the next few years. With co-financing from EU funds, HEP is also preparing to open fast-charging stations along the TEN-T motorway corridor. Croatia will co-finance EV purchases by individuals with grants equal to up to 40% of the purchase price and has allocated 12 million kuna (1.6 million euro) for the purpose, in order to encourage buyers to seriously consider buying environment-friendly cars. The purchase of electric scooters, motorcycles and quadricycles will be co-financed with grants of up to 20,000 kuna, while incentives of up to 5,000 kuna will be offered for the purchase of electric bikes.

Fuel retailer Jugopetrol aims to be a pioneer in supporting the expansion of the use of electrically powered vehicles in Montenegro by building the country’s first electric vehicle charging station in 2018. The company plans to install an EV charger at one of its filling stations this year and a further two in 2019.

In Serbia, the government has installed two EV charging stations on pan-European Corridor X route in the country, at the Presevo and Bubanj Potok toll stations of the motorway linking Belgrade to southern Serbia.

The Romanian arms of German utility E.ON and Hungarian oil and gas group MOL plan to build 40 charging stations for electric vehicles in Romania by 2020 with the support of European funds.

Slovenian postal operator Posta Slovenije signed a deal with local electricity and gas trading group GEN-I to cooperate in e-mobility and green next-generation delivery services, which will see it entirely electrify its fleet. The aim of the partnership is to transform freight delivery services by offering environmentally-friendly and efficient green parcel delivery via electric vehicles powered by solar energy or other non-carbon sources of electricity.

With the car parts industry in SEE expanding rapidly, the electric mobility segment also attracts investments and several projects for production of e-vehicles in the region have been launched. Chinese manufacturer Cenntro Automotive Corporation and its partner, Luxembourg-based SEVIC eMobility, intend to invest 10 million euro in the next three years to produce a small electric utility vehicle in Bulgaria.

At the same time, Germany’s ZF Friedrichshafen is expanding its manufacturing capacity for electric mobility products by building a new facility in the Serbian city of Pancevo. ZF Friedrichshafen intends to invest 40 million euro in the project in 2019, 25 million euro in 2020 and 20 million euro in 2021.

Chinese investor Karl Soong and Croatian entrepreneur Mladen Nincevic, owners of Zadar-based Green Tech Group, are planning to build a factory for electric cars and scooters in the Croatian town of Kula Norinska over the next 10 years.

Bulgarian supercar manufacturer SIN Cars has unveiled in Sofia a concept of a multifunctional electric car, named L-city, which is planned to be manufactured in Bulgaria and sold abroad. SIN Cars was founded by Bulgarian engineer and racing driver Rosen Daskalov in the UK in 2012. In 2015, the company started production of road electric vehicle Sin R1 and moved its headquarters to Munich, Germany, and Ruse, Bulgaria.