Zetta Plans BEV For The Masses

While most automakers today are turning their gaze to growth in the Chinese market, one Russian carmaker is looking nearer to home.

CEO of start-up Zetta, Denis Shchurovsky, has stated he is aiming the company’s entry-level new BEV at Europe and the Middle East. The start of production of the four-seat micro-car is due in December, 2019 and its basic specification will include two hub motors in the front and a 10 kWh battery providing a claimed 124 range and maximum speed limited to 74mph. Price in the local market will start at a 450K rubles (roughly $6,500). Zetta hopes to produce 2,000 vehicles in 2020 and reach production capacity of 15,000 units per year later in the foreseeable future.

Gap in the market

The new EV belongs to the same size category as the Mitsubishi i-MiEV. It was sold in Russia until 2017 but never gained popularity for two reasons: it was too expensive and too small.

Both EV and micro-cars are so niché products in Russia that analysts have become used to ignoring them in studies. The most popular electric car nationally in the used C-class is the Nissan Leaf imported from Japan and sold for price as low as $7,000. In the first quarter of the current year, mere 572 units were sold. As for new EVs, they sell in much less volume.

So, Zetta’s marketing plan to yearly sell 5,000 electric micro-cars in the national market definitely raises eyebrows. “Judging by what is known about the design and specs, the vehicle is purposed at commuting almost exclusively within towns dealing with congestion and parking problems,” says Eduard Cherkin, principal at consulting firm Roland Berger (Russia). “Russian private customers rarely buy a car with this specific goal in mind.”

This fact may not be a sign of certain failure for Zetta but a risk because the new vehicle is not the same proposition as other micro-cars, just because it will be three times cheaper than the i-MiEV. Finally, a BEV is going to be affordable to the degree when it competes with low-budget B-class ICE vehicles. Shchurovsky says: “The share of drivers in the nation who are keen to reduce cost of ownership is ever-growing.”

Cherkin assumes that current owners of B and C-class cars won’t trade them for a micro. Instead, Zetta will compete with bikes and e-scooters. Some of the two-wheeler users will definitely prefer an affordable electric micro-car because of its comfort, combined with free parking.

Still, the analyst believes that the commercial sector can be a better prospect for Zetta: “The delivery companies are very much interested in EVs’ 30% less operating costs than that of ICE vehicles.” Also, previous years of poor EV sales cannot serve as a basis for predictions: “The market is ready for a more active uptake of EVs. Certain signs reveal unsatisfied demand.”

Auto dealer Avilon “sees interest to electric cars from the customers,” the company’s PR manager Alina Sidorina stated in an e-mail. However, “It’s too early to talk about concrete plans, too many factors are undefined.”

Zetta is also planning to export up to 10,000 vehicles yearly into Europe, the CIS and the Middle East. The global market provides a completely different environment, says Shchurovsky: “We’re seeing rather good demand.” Indeed, Zetta EV can become the most affordable BEV in the European market. Some of its closest competitors include the e.GO Life, a four-seat BEV for price starting at $17,838, or the $13,462 Microlino, a two-seater belonging to the same L7E category as the Russian model.

Affordability

The ruble’s twofold drop back in 2014 gives insight into the BEV’s low price: most of its parts are produced locally. “Each part of any electric vehicle belongs to one of two categories. Body and chassis parts are what unites EVs and ICE vehicles, drivetrain and energy storage and electronics are where distinctions lie,” says Roland Berger’s Cherkin. “Localization of the common automotive parts is not a problem. Issues can arise when dealing with the EV-specific parts.”

Shchurovsky shares the opinion. His company is tackling the challenge by producing hub motors and much of the electronics in-house. Most non-specific parts will come from domestic suppliers while battery is the only part to be imported from China.

Sourcing production in Russia is both an advantage and a threat tied to higher levels of uncertainty and Zetta has to deal with this too. On June 18, national newspaper RG.ru reported that the company admitted a risk of delay in start of production because of late supply of some manufacturing equipment. The affordable BEV is yet to accomplish its way into mass production, and it’s unlikely to be a smooth ride.