In 2024, electric vehicles will account for 16% of the total number of vehicles in the global car market[1] . This trend is also supported by the governments of various countries, which actively support the decarbonisation of transport systems in general and the introduction of electric vehicles in particular. According to statistics available at the end of 2022, the leading countries in terms of electric vehicle sales in the world are Western Europe and China.
The main measures to support this tendency are subsidies for the purchase of electric vehicles, tax incentives and customs duty exemptions. Thus, citizens permanently residing in Armenia, Belarus, Kazakhstan and the Kyrgyz Republic are granted customs duty exemption benefits. However, ownership, use and disposal of electric vehicles cannot be transferred to persons with citizenship and/or permanent residence in the Russian Federation[2].
Norway is leading the worldwide sales of electric vehicles[3]. It is one of the first countries to adopt a number of legislative initiatives to incentivise the use of electric vehicles. Already in the 1990s, the Norwegian government took a number of measures to exempt electric vehicles from paying the purchase/import tax, annual road tax, charging for toll roads and several others[4], which made the use of electric vehicles more affordable for purchase and use. Moreover, according to the CNBC TV documentary "How Norway Built An EV Utopia While The U.S. Is Struggling To Go Electric"[5] dated 17 February 2024, electric vehicle owners enjoy free parking, passage along bus lanes, ferry crossings and toll roads, and are exempt from the 25% Value Added Tax (VAT). These initiatives are still in force today, which in turn has only increased the number of electric vehicles in Norway.
As regarding our neighbour countries, Uzbekistan has adopted the following regulatory acts: "On Measures of State Support for the Organisation of Electric Vehicle Production"[6] and "On Measures to Expand the Infrastructure for the Operation of Electric Vehicles", both dated 19 December 2022[7]. There are advantages for import of electric cars - neither customs duties nor excise taxes are to be paid for them. Also, in order to stimulate sales, the state partially reimburses interest rates on loans used to purchase electric vehicles manufactured in Uzbekistan and sold in the domestic market.
In addition to the exemption from customs duties, in Kazakhstan, electric vehicles are also exempt from transport tax until 31 December 2025 on the basis of Paragraph 9 of Annex 3 to the Decision of the Council of the Eurasian Economic Commission of 20.12.2017 "On Certain Issues Related to Goods for Personal Use"[8]. At the same time, according to Annex 3 to the Order "On Approval of the Methodology for Calculating the Recycling Fee" of the Minister of Ecology, Geology and Natural Resources of the Republic of Kazakhstan[9] dated 2 November 2021, from 4 July 2021, owners of electric vehicles are exempt from paying the recycling fees.
Chargers and Infrastructure and Their Problematics
A major limitation to the development of electric vehicles is the so-called "EV range anxiety", afear of electric vehicle drivers that the battery charge may not be sufficient for the planned route and that there will be no charging station along the way[10]. Accelerating the development of charging infrastructure is one of the key solutions to the range anxiety. Regardless of their destination, electric vehicle drivers need the confidence that they can conveniently find charging points along their route and be assured of the reliability of these chargers. In Norway, the most densely populated country with electric vehicles, there are still reliability issues and a lack of standardisation of chargers, related payment systems and apps - each company has its own apps and payment methods.
Currently there are 269[11] charging stations across Kazakhstan, which is rather few given the country’s size, as shown in Figure 2 below. The main problem in Kazakhstan is the low number of EV charging stations outside major cities such as Almaty, Astana, Shymkent, and their absence on highways, which prevents travelling by car between cities and countries.
In large cities of Kazakhstan there is charging stations that recharge cars in garages, parking lots, charging stations and in houses. However, there is currently a ban on the installation of charging stations in residential buildings, which creates a number of inconveniences for the citizens of Kazakhstan.
So, to overcome the range anxiety of electric vehicle drivers, the key solution is to create an appropriate and efficient charging infrastructure for electric vehicles. This will help to establish drivers' trust and reassure them that they can easily find charging stations on their route and rely on their reliability, which ultimately helps to accelerate the development of EV adoption infrastructure.
Developing the Electric Vehicle Sector in Kazakhstan
A key factor for development is the adoption of legislation and regulations that promote the development of electric vehicles and infrastructure, including safety standards, environmental requirements and economic incentives, to improve the current situation. To encourage the purchase of electric vehicles, it may be necessary to make additions-amendments to current legislation and develop regulations aimed at:
- additional support measures for the acquisition of electric vehicles;
- regulations to standardise charging station networks;
- acts to integrate charging infrastructure into new construction of roads and buildings.
New mandatory standards for charging stations for electric vehicles were adopted in Kazakhstan on 22 April 2024. In accordance with the order of the Committee for Construction, Housing and Utilities of the Ministry of Industry and Construction, in the part "Urban planning, layout and development of urban and rural settlements" of the Construction Norms of the Republic of Kazakhstan[12]provides for the addition of paragraph 11.1.5, which prescribes the installation of charging service infrastructure for electric vehicles on the territory of settlements. Charging stations can be located at petrol and gas stations, service stations, parking lots, roadside service facilities, as well as in residential, public, business and industrial areas. In addition, the construction of parking lots is now required to provide spaces for electric vehicles with equipped chargers, and only factory charging stations may be used. It is recommended that fast and super-fast charging stations be installed at petrol stations and gas filling stations, and that at least one charging space for electric vehicles at petrol stations and gas filling stations be mandatory for wheelchair users.
Besides creating charging station infrastructure for electric vehicles, it is important to encourage private entrepreneurs and companies to invest in renewable energy. A programme for investment in electric vehicle infrastructure could include subsidies, grants or preferential loans for private entrepreneurs and companies that wish to invest in the development of charging infrastructure. Such a programme could also combine mechanisms to encourage private investment with, for example, tax incentives or public-private partnership mechanisms.
Investment in charging infrastructure would create new workplaces and boost economic growth, while stimulating demand for electric vehicles and related goods and services such as maintenance, repair and technical support. It is also important to be able to influence the development of new renewable energy technologies - for example, the Norwegian experience of building and installing charging stations powered by their own solar panels or wind turbines that generate their own electricity could be adopted. In addition to the incentives already available, a programme could be developed to subsidise rural areas from the government to develop charging station infrastructure.
In conclusion, the development of the electric vehicle sector in Kazakhstan requires a comprehensive approach, including the adoption of appropriate legislation to encourage investment in the infrastructure of accessible and easy-to-use charging station networks. These measures help to improve the environmental situation, reduce dependence on traditional energy sources and stimulate economic growth through innovation and the creation of new workplaces.
[1] "The world's best-selling electric cars January 2024", José Pontes, https://cleantechnica.com/2024/03/05/top-selling-electric-vehicles-in-the-world-january-2024/
[2] "Tariff concession for imports of electric vehicles to Kyrgyzstan for 2024-2025 extended", https://mineconom.gov.kg/ru/post/9836
[3] https://ourworldindata.org/electric-car-sales#:~:text=Globally%2C%20around%201%2Din%2D,these%20trends%20across%20the%20world.
[4] Norwegian EV policy, https://elbil.no/english/norwegian-ev-policy/
[5] https://www.youtube.com/watch?v=R5DbRyeZNRk
[6] "On measures on state support for the organisation of production of electric vehicles" Decree of the President of the Republic of Uzbekistan No. ПП-443 dated 19.12.2022 https://lex.uz/ru/docs/6316585
[7] "On measures to expand the infrastructure for the operation of electric vehicles" Decree of the President of the Republic of Uzbekistan of 19.12.2022, No. PP-444,https://lex.uz/docs/6316595
[8] Decision of the Council of the Eurasian Economic Commission of 20 December 2017 № 107 "On Certain Issues Related to Goods for Personal Use" (Moscow) (as amended as of 09.12.2023) https://online.zakon.kz/Document/?doc_id=33509536&pos=218;7#pos=218;7
[9] "On Approval of the Methodology for Calculation of the Recycling Payment" Order of the Acting Minister of Ecology, Geology and Natural Resources of the Republic of Kazakhstan dated 2 November 2021, https://adilet.zan.kz/rus/docs/V2100025100
[10] https://www.theguardian.com/business/2023/dec/09/stranded-electric-car-ev-range-anxiety-charging-network
[11] News portal Kapital KZ, https://kapital.kz/auto/124307/za-god-kolichestvo-legkovykh-elektrokarov-v-kazakhstane-vyroslo-v-devyat-raz.html
[12] Official website of the Committee for Construction and Housing and Communal Services of the Ministry of Industry and Construction https://www.gov.kz/memleket/entities/kds/documents/details/649644?directionId=2306&lang=ru