BUSINESS
The future is bright for electric cars in Georgia
30 November, 2018
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones. According to him, hybrid cars are just the first step towards the electric car era in Georgia. Because of this confidence, he started a new business in 2016.

“E-space” promotes electric driven vehicles and provides the necessary infrastructure. Gvalia stands in the newly opened and futuristic-looking showroom of the company at the Rose Revolution Square in
downtown Tbilisi. There, in between electric scooters and various car models, he explains where his optimism comes from.


Small distances and clean energy in favor of e-cars


“Georgia is a small country, so the average distance people travel per day is around 40 to 50 kilometers”, says Gvalia. A distance that is easily doable even with an older electric car. Furthermore, most of Georgians own-generated electricity is derived from hydro power plants – a clean energy source in terms of emissions. And more dams for the production of hydropower are being planned.

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Hybrid cars are a familiar sight in Tbilisi

Indeed, these are solid prerequisites for an e-car revolution, from which the inhabitants of the extremely traffic and smog exposed city of Tbilisi would surely benefit a lot.

Read more: Tbilisi among dangerous cities in Europe where air pollution is high

However, the actual numbers don’t really support Gvalia’s thesis. So far, only 1500 out of a total of over one million cars in Georgia are electric. The present reluctance in the acquisition of e-cars can be explained by the poverty of the country, says Gvalia. Well above 90 percent of sold cars are used vehicles that cost between 5’000 and 10’000 U.S. Dollars.

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Last year’s protest against air pollution in Tbilisi

“Until now, the market for used cars simply lacks enough electric cars in this price segment”, so Gvalia. That explains also why Nissan LEAF is the most abundant e-car in Georgia. The production of this affordable model for the retail market started as early as 2012.


The fuel affordability is extremely low in Georgia


Apart from this, there are compelling reasons for Georgians to buy electric cars. First of all, petrol is relatively expensive in Georgia. While in the UK, people spend an average of 5.5 percent of their daily income for one gallon (about 3.7 liters) of petrol, this number is a lot higher in Georgia. Taking the last year’s average income per capita, raising it up to 330 GEL as incomes increased over the last years, an average Georgian has a daily income of 11 GEL. Consequently, in Georgia as much as 87 percent of an average daily income is spent for one gallon of fuel. “Driving an electric car costs six time less than a car with a fuel consumption of ten liters”, says Gvalia.

Read more: Doing business in Georgia has become easier than in America

Also, the maintenance costs of an electric car are lower. There is no oil nor fuel filter change. Furthermore, the basic mechanic of e-cars consist of less than a dozen moving parts – in a combustion engine there are several hundred moving parts. “The lower maintenance costs are a very strong argument, especially for Georgians who mostly own used cars without any warranty”, - says Gvalia.

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Traffic and congestion are loyal companions in the Georgian capital


Battery change could prevent Georgians from buying electric cars


That said, the lacking warranty could backfire on electric car sales. Just like the battery of a smart phone, the battery of an electric gradually loses its ability to hold a charge. Eventually, it needs to be replaced. As the warranty will most likely be expired by that time, Georgian e-car owners must be prepared to pay for the exchange themselves at some point.

How much this will cost is difficult to estimate at this point as there are literally no experience values. Last year, a new battery for Nissan LEAF cost 4,000 U.S. Dollars. However, the production costs of batteries for electric cars have continuously been decreasing in the last years. If this trend continues, it might further motivate Georgians to switch to e-cars in the future.

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E-space wants to be ready for the e-car revolution in Georgia, photo courtesy: E-space

Lower battery costs is one thing. Another thing is that good infrastructure for electric cars that still needs further development in Georgia. So far, Gvalia’s company E-space has set up 55 public chargers. “You can already call this a network, but we need more chargers at peoples working place, for example and fast chargers along the highways”, - says Gvalia. Until now, charging was free. This will most probably change next year.

Read more: The number of electric cars and chargers rise in Georgia

Nevertheless, Gvalia isn’t afraid that this could discourage people. “In fact, most electric car owners charge their cars at home, where they have to pay for it anyway”. This is why E-space collaborates with real estate developers in order to install chargers at parking lots that belong to private apartment buildings.

Entrepreneur and former banker Gvalia is the only investor of E-space. The money he put into the company was a long term investment that will pay off in three to five years, he’s convinced. “By then, there will be enough second hand e-cars on the used market and we’ll be ready”, - says Sulkhan Gvalia and draws a steep curve with his hand in the air.

Author: Martina Polek

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