Poland partners with China to produce its first electric vehicle

Poland picked Zhejiang Geely Holding Group as a partner to build it first electric car, betting that the popularity of plug-in vehicles in the European Union’s largest eastern economy will grow rapidly over the coming years.

The deal between state-controlled ElectroMobility Poland SA and the Chinese auto maker should allow the country to start mass producing its Izera brand of vehicles at the end of 2025.

Geely, which owns Volvo Car and stakes in other companies including Mercedes, will supply its Sustainable Experience Architecture platform for Polish cars in its first such licensing agreement, according to ElectroMobility Chief Executive Officer Piotr Zaremba.

Poland’s previous plan to bring Izera to the market in 2020 has been marred by delays.

ElectroMobility, whose minority shareholders include the country’s largest power utilities, is yet to start building a plant and expects it to have an initial capacity to produce 100,000 cars annually.

It’s also looking for 6 billion zloty (R22 billion) in equity and debt funding.

The agreement doesn’t envisage financing from Geely, but should help ElectoMobility make headway with investors to receive first commitments late next year, the company said on Thursday.

Poland had fewer electric cars at the end of September than Germany registers monthly. The number of such vehicles should reach almost 1 million in 2030, according to estimates from the PSPA association citied by ElectroMobility.

The deal with Geely is a major step for Poland, which stopped producing its last domestic brand of car called Polonez 20 years ago.

The country currently hosts a number of plants from the car battery industry, including LG Chem, Northvolt and Umicore.

The presence of the auto industry, including Stellantis, Volkswagen and Mercedes-Benz, in Poland should allow ElectroMobility to reach its goal to source 60% of Izera components locally.