A Phoenix Rising: Bulgaria's Electric Vehicles Industry

Novinite Insider » SPECIAL REPORT | Author: Ivan Dikov |July 18, 2011, Monday // 02:46
Bulgaria: A Phoenix Rising: Bulgaria's Electric Vehicles Industry Pictured: Bulgarian Minister of Economy, Energy, and Tourism Traicho Traikov test-driving a Mitsubishi electric vehicle in the spring of 2011. Photo by BGNES

An international conference on electric cars organized in Bulgaria's capital Sofia in February 2011 turned into a much more high-profile event than anybody expected.

It was then that Bulgarian Prime Minister Boyko Borisov and Economy Minister Traikov made it clear that Bulgaria hopes to become a "major player" in the development and production of electric cars. The conference was surprisingly attended even by EU Commissioner for Industry and Entrepreneurship Antonio Tajani.

"Bulgaria is certainly one of the major players who have committed serious efforts to electric cars and electric mobility. This is proven not just by the conference on electric vehicles held in Sofia on February 10-11, and other similar forums, but also during the meetings of the EU Ministers for competitiveness in the EU Council of Ministers. Bulgaria has always declared this commitment on its part," EU Commissioner Tajani told me in an exclusive interview.

What grounds are there to believe Bulgaria can become one of EU's hubs for electric vehicles?

Once Upon a Communist Time...

Communist Bulgaria was interesting for a number of reasons. One of them was the quest of the regime led for 36 years by dictator Todor Zhivkov (1954-1989) to develop hi-tech industries and research – such as computers, space technologies, and electric vehicles.

Of course, communist Bulgaria's machine-building industry, which employed 430 000 people, and provided 20% of the GDP, and 55% of exports in 1989, suffered from the flaws of the planned economy but there was at least one sector where it really had the edge - the production of electricity-driven forklifts and trucks.

The first Bulgarian electric vehicle ever was produced in 1951. Three decades later the almighty Bulgarian holding Balkancar produced about 90 000 electric forklifts a year (the rest of Europe's output was 18 000), and was one of the world's top three exporters (together with US company Clark and Japan's Toyota) with 31 factories in Bulgaria and 8 abroad.

The electric forklifts have remained Bulgaria's machine-building specialty since the communist era. Photo by EVIC

Unlike all other countries in the COMECON, the Soviet Union-dominated economic bloc, Bulgaria gave up on automobile industry to focus on electric vehicles. Thus, the Bulgarian leadership back then might have unwillingly done their nation a big favor because 20 years after the end of the communist regime and the collapse of Bulgaria's industry, electric cars are emerging as the transportation mode of the future.

Even though electric cars fell into disrepute after their peak in 1995-2003, they are now believed to be set to conquer the world because they are clearly cheaper to run and more environment-friendly than conventional vehicles.

A New Life for an Old Industry

The new revolutionary event for Bulgaria's electric vehicle industry came in November 2009 when a number of industrial manufacturers from the machine building sector, communications and oil industry, and top universities and research institutions formed an "Electric Vehicles Industrial Cluster" (EVIC), a 100% Bulgarian NGO designed to spur cooperation and coordination between various actors in order to help initiate the industrial production of electric cars in Bulgaria.

"Bulgaria had extremely good positions in the electric vehicles production, and the best part is that we have preserved part of the specialists, not to mention the fact that many of the Bulgarian industrial projects for electric forklifts are still available. A forklift is a precursor to electric cars. I love saying that the new electric cars are actually "tuned forklifts." Their principles of operation are basically the same," explains Iliya Levkov, Chair of Bulgaria's Electric Vehicles Industrial Cluster.

Levkov points out that one of the cluster members, the Di-Ven company based in the Danube town of Lom, has already produced a new electric light truck (unveiled in 2010).

The light-weight electric truck produced by Lom-based Bulgarian company Di-Ven in 2010. Photo by EVIC

"The analogies with the old electric vehicle platforms are very close. Yes, this is the same thing. Let's not hide it; after all this is something that survived from Bulgaria's older industries. This vehicle is the first manifestation of the rising phoenix of Bulgaria's electric vehicle industry. It is 100% Bulgarian-made so let's give it a chance. It hasn't been tuned, and it doesn't boast futuristic forms but this can be done quite easily, even by students from the Sofia Technical University," Levkov says.

He elaborates, however, that the members of EVIC, i.e. Bulgaria's reviving electric vehicles industry, will not be able to start the production of new electric cars that soon - probably not within a couple of years. However, there is one other sector related to electric cars where Bulgaria has got the edge.

Bulgaria's Trump Card: Conversion

Among other things, EVIC is introducing a new word in the Bulgarian language - "konversiya" - or conversion – the transformation of a car with an internal combustion engine into an electric car.

"Here we have an enormous lead before the other countries because we have some of the best producers of electric engines and lead batteries. We are aiming at the low segment of the market because the lithium-ion batteries are still very expensive, which is why the price of the new electric cars is so high," the Cluster Chair explains.

He emphasizes that while a brand-new electric vehicle costs about EUR 35 000, the conversion of a gas-fueled car into an electric one will cost about EUR 10 000, and Bulgarian companies are already well on the way to launch the industrial conversion of gas-fueled cars.

At the time this article was being prepared, the Industrial Cluster had justed reached an agreement with Avtomotor Korporatsiya, the official importer of Citroen, for the industrial conversion in Bulgaria of two Citroen models – Berlingo and Jumper – into electric vehicles – a deal described by Cluster Secretary Ivan Kostov as "revolutionary."

A gas fueled car converted into an electric vehicle with Bulgarian technology. Photo by EVIC

According to EVIC, only a handful of countries in the world in addition to Bulgaria, such as the USA and Italy, have the experience and capacities for the industrial conversion of conventional cars into electric vehicles.

In the Balkans, Turkey is said to be emerging as the other hub for electric cars thanks to its Renault plants, which are expected to produce 115 000 electric cars for Israel and Denmark in 2011. Turkey, however, is not focusing on conversion capacity, and, according to EVIC, Bulgaria has the advantage of having set up the Cluster to coordinate its producers.

Infrastructure: An Egg or Chicken Question

One of the greatest issues with electric cars is the lacking infrastructure such as charging stations, which brings up an egg-or-chicken question about which should come first – the chargers or the vehicles.

There are 3 brand-new electric cars already running in Bulgaria's streets and several converted ones. Five companies within EVIC have declared readiness to participate in the construction of charging stations in the bigger cities. Several larger municipalities such as Montana, Lovech, and Dobrich have offered to help as well.

However, the fact that definitions for electric vehicle and electric charging stations still do not exist in Bulgarian legislation turns out to be a challenge.

Renergy, a Bulgarian company, a member of EVIC, has launched a project to build charging stations around the country in partnership with Siemens, RWE, and one of the Bulgarian power utilities.

"The administrative procedures for installing electric charing stations turned out to be a much greater challenge than we expected," explains the managing director of Renergy Nikola Gazdov. "According to the State Construction Supervision Commission, a charging station has to be be treated like a building which creates all kinds of complications. This is not to say that the regulations in Bulgaria are bad, and elsewhere they are good. It is just that electric cars are new, and many countries still don't have proper regulation."

Renergy is seeking ways around the ordeal by purchasing private plots and working with municipalities so that in 6 months three Bulgarian cities including Sofia can have their first public charging stations.

The Industrial Cluster itself has called for massive investments in the Bulgarian electricity grid in order to move in the direction of the so called "smart grids", which are expected to utilize the batteries of the electric car as storage devices that can regulate the electricity consumption during the day and night.

"In order to materialize Bulgaria's desire to develop renewable energy and introduce electric cars, we need the proper infrastructure managed by intelligent or "smart" electric grids. Unlike the existing grids, with smart grids, electricity is not only transmitted from a power plant in all directions but it can be moved from the source to the consumer and from the consumer to the source," Bulgarian Economy Minister Traikov explained in January 2011 after he met with Toshiba CEO Norio Sasaki in Japan, as Toshiba offered the Bulgarian government a large-scale project combining "smart grids" and the introduction of electric cars based on renewable energy sources.

A gas fueled car converted into an electric vehicle with Bulgarian technology. Photo by EVIC

The Very Near Future

EVIC insists that the Bulgarian government should adopt a package of 18 measures such as tax breaks, subsidies, and free parking to encourage the introduction of electric cars but that these must be only temporary because the new vehicles will be competitive on a market basis.

With a number of initiatives in an early stage, EVIC Chair Iliya Levkov expects decent results from Bulgaria's electric car industry in the near future – some 15 000 conventional cars are supposed to be converted by the end of 2012, in addition to hundreds of new electric vehicles. This will still be a small number out of 3 million registered cars in Bulgaria but a snowball effect is expected to follow once industrial conversion is introduced in Bulgaria.

"There will be a boom of converted vehicles in Bulgaria in 2012. I am convinced of that because parallel to our production talks, we have also negotiated with business clients ready to buy them. These are, first and foremost, delivery, shipping, and logistics companies," Levkov reveals.

Gazdov is also positive, predicting that at least 50 converted and 50 new electric cars will be in use in Bulgaria by the end of 2011.

A few other factors are also boding bright days for the electric car industry in Bulgaria. UK electric car company Zero Carbon 2020 Ltd is starting an assembly line for electric vehicles in Bulgaria's Stara Zagora with an initial capacity of 100 cars, to reach 5 000 in 2015.

Meanwhile, EVIC is hoping for cooperation in the industrial conversion of conventional cars with the newly-built car manufacturing plant in Lovech, a joint venture of China's Great Wall Motors and the Bulgarian company Litex Motors for the assembly of Chinese cars for the EU market.

"This industry is just emerging, and has an enormous potential, with high added value, investments and highly-skilled labor, it can uplift Bulgaria's economy. This sector should be the number one priority in government economic policies because we have the chance to make it happen right here, right now," EVIC Chair Levkov states with optimism.

Gazdov, in turn, has stressed Bulgaria's IT potential for the development of software for the smart grids of the future and the operation of electricity-driven vehicles and devices.

The next few years will be crucial for electric cars globally, and for the industry in Bulgaria in particular. Still, the small Balkan country seems to have the potential to be a "major player". Time will show if the Bulgarian "electric vehicle" phoenix can indeed rise and pull it off.

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Tags: electric cars, Electric Vehicles Industrial Cluster, EVIC, Iliya Levkov, Nikola Gazdov, REnergY

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