(Bloomberg) -- Poland’s effort to establish its own electric car brand is running out of road, with a top executive for the state-backed project warning that its Chinese partner may walk over a lack of funding.
ElectroMobility Poland SA, which has raised about 580 million zloty (€133 million) to date from the state and state-controlled companies, needs to line up €2 billion to €3 billion more to get its carmaking initiatives rolling. It has an agreement in place to license technology from China’s Zhejiang Geely Holding Group Co.
But that deal, reached two years ago this month, could be nearing an expiration date, according to Deputy Chief Executive Officer Lukasz Maliczenko. Delays in securing European Union funds and competition from other countries in the bloc vying for Chinese investment may squander the partnership, he said in an interview.
“I see it as a big risk that the delay in the financing process could lead to the need of revision of our partnership, or even building it with somebody else,” Maliczenko said. “It would be a big loss and a wasted opportunity.”
Representatives for Geely declined to comment.
ElectroMobility traces its roots to nationalist former Prime Minister Mateusz Morawiecki, who predicted eight years ago that 1 million electric vehicles would be on Poland’s roads by 2025, and wanted many of those to be manufactured by a domestic company. Morawiecki left office last year, and the country will come nowhere close to registering the number of EVs he envisioned, with only more than 74,000 now on the road.
Maliczenko said that if ElectroMobility manages to secure funding this year, it could begin constructing a plant in the coal-rich southern Polish region of Silesia in the first quarter, then start production about two years later. The factory would have the capacity to make 150,000 vehicles a year.
Those vehicles would be sold under company’s Izera brand, and potentially brands of its partner’s choosing. ElectroMobility may make plug-in hybrids, in addition to battery-electric vehicles, to tap into a broader market of consumers.
The Polish project would align with Chinese automakers’ efforts to localize production in the EU to avoid higher tariffs implemented last month. On the other hand, Beijing has pressured automakers to pause expansion in the bloc while negotiations over the levies are ongoing, Bloomberg News reported last month, citing people familiar with the matter.
This already seems to be having an effect. Money.pl reported this week that Zhejiang Leapmotor Technology Co.’s joint venture with Stellantis NV had suspended its project to produce electric city cars in Poland. The state foreign trade and investment agency PAIH told the website that the move came as a result of a decision by the Chinese Ministry of Economy.
Maliczenko said lenders haven’t signaled during initial talks that the ElectroMobility project is too risky or couldn’t continue. Last month, Energetyka24.pl reported that Geely could opt to invest in a factory in Spain, since the Polish project is taking too much time.
“We need to remember that even as we were able to secure competitive technology, there’s a race for taking a right spot on the European market,” Maliczenko said. “Both for us and our partner, further delays are simply a lost opportunity to do business.”
--With assistance from Chunying Zhang.
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