Igor Sechin: buyers are not willing to overpay for an electric car

The sinking demand for electric vehicles demonstrates the lack of planning and haste with which Western countries initially approached electrification of vehicles, Rosneft CEO Igor Sechin said in his report at the Energy Panel held as part of the 27th St. Petersburg International Economic Forum.

“It is obvious that, contrary to optimistic forecasts, they are not a panacea for all environmental challenges. Demand for electric vehicles is slowing down worldwide, despite unprecedented efforts to support this industry on the part of the governments”, Igor Sechin said.

He noted that currently revision of electric vehicle subsidy policies is on the way. “While they succeeded in attracting buyers with high subsidies a few years ago, Western governments are now planning to impose taxes on electric vehicles to plug budget holes”, said Igor Sechin.

The Rosneft Chief Executive Officer referred to IEA estimation, which says that by 2035, the shift to electric vehicles could result in a USD 110 billion shortfall in motor fuel taxes, which are allocated to maintain roads and improve transportation infrastructure.

Igor Sechin reminded that in order to compensate the budget shortfall in revenue, a number of countries, including the UK, New Zealand, Israel and most North American states, are already imposing taxes on electric and hybrid vehicles. Moreover, Germany recently announced an end to incentives and accelerated removal of subsidies.

“As subsidies are reduced, it becomes clear that even in wealthy Western countries, buyers are not willing to overpay for an electric car. On top of the high price, there are a number of issues that should be addressed to ensure widespread deployment of electric vehicles. These include insufficient drive range, underdeveloped charging infrastructure, the need to recycle batteries, shortage of critical metals and environmental impact of their extraction, safety issues on the road, and much more”, Igor Sechin stated.

In addition to failures of charging stations, which, as Sechin noted, has grown by 50% in two years in the U.S. alone, the issue of safety is also acute - according to recent studies, hybrids and electric cars are 2-3 times more likely to hit pedestrians than cars with an internal combustion engine.

Information & Advertising Department
Rosneft
June 8, 2024