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E-cars set to mount a charge on Hungary

Electric-powered cars are catching on here, but the biggest stumbling block is the lack of places where drivers can plug in their vehicles. Spurred by EU incentives, the government is working to increase the number of charging stations.

Minister of State for Environmental Affairs of the Ministry of Rural Development Zoltán Illés charges an e-car at a charging station, which was set up in Budapest in March 2014 with the support of the government’s Jedlik Ányos Plan. (Photo: kormany.hu)

Now that Tesla has unveiled its long-awaited Model 3 electric car, e-mobility could get the major push it needs at a global level. A price tag starting at $35,000 is bound to bring Elon Musk’s latest baby within reach of consumers on something nearing a mass scale, as is indicated by the 325,000 pre-orders placed by early April.

It remains to be seen how soon the Model 3 will hit the road in this country. The question of whether Hungary can catch up with its trend-setting European counterparts essentially comes down to development of proper charging infrastructure and incentive-focused regulation: Until there are more places to charge e-cars, the number of such vehicles will likely remain low in Hungary.

Catching up will take Hungary some time, as Western Europe has six-to-seven years of market experience already. But relevant European Union directives leave this country no choice other than to drive down the e-path at top speed. Stringent rules expect Member States to radically curb CO2 emissions and cut energy dependency.

E-rides subject to infrastructure

The Hungarian government seems ready to take action, as outlined in the Jedlik Ányos Plan, known as JÁT. Announced in March 2014 and elaborated over the course of a year, the plan sets out the blueprint for turning Hungary into an e-car hub. Ambitions are set high; the plan calls for the number of e-vehicles to reach 63,000 by 2020. This will require a dramatic increase from the April 29 figure of the Central Office of Administrative and Electronic Public Services (KEKKH), which put the number of e-vehicles registered in Hungary at that date at only 666. The effort does seem to be gaining some traction, however, as the rate of new weekly registrations has hit 50 to 60 on average.

One key precondition for meaningful growth in e-vehicle ownership is the construction of a sufficient number of charging stations. According to experts, at least 5,000 charging stations would be required nationwide. The first phase of large-scale installations is under way and it is badly needed. Should you wish to go on an e-ride in the Budapest area now, you have more than 50 public purpose charging stations to rely on. They are typically located in busy spots in the downtown districts.

“It is hard to provide exact figures as no official records are kept. We are relying on the data provided by our members, but they are not being updated fast enough and the relevant online search sites also normally lag behind,” Zoltán Vígh, public affairs executive of the Jedlik Ányos Cluster, one of the organizations behind JÁT, told the Budapest Business Journal.

Given the legal complexities of selling small amounts of electricity, the state-owned ELMŰ-ÉMÁSZ utility is not able to charge money for people using the stations, and they are currently treating them as marketing for the planned operation of charging stations around the city, according to reports. Unfortunately that seems to mean that it is hard to drive operation of the stations through a simple profit motive. This situation should change as the laws are adapted and the number of charging stations grows.

The Hungarian Electromobility Association is doing what it can to surmount the various legal and infrastructural obstacles to a greater proliferation of charging stations in Hungary, and the region.

“Recognizing the regional problem, after spending almost two years developing a global network in electromobility and getting a better understanding how the first adopter markets were regulated and developed, the Hungarian Electromobility Association has established a partnership with professional, regulatory and other parties from ten countries along the Danube Region,” said János Ungar, a member of the board of the Association. “Our aim is to support the different stakeholders (e.g. regulators, municipalities, companies) with practical and useful guides and international expertise in setting their strategies and carrying out their plans.”

Getting past the bottlenecks

The current locations of charging stations reflected the needs at the time, with their installation mostly initiated by municipalities. Under a new set of rules, however, municipalities are now obliged by law to place further public purpose charging stations on public parking lots. Private sector players such as shopping malls, office buildings and parking houses will face the same obligation, Vígh explained.

“Non-public purpose charging points will gain ground too, once corporate e-car fleets appear in big numbers. In turn, the government will be in charge of countrywide development, in order to ensure that e-vehicles can cross Hungary comfortably,” Vígh noted. Since charging point installation efforts have tended to be made by different stakeholders under PPP schemes, it is hard to keep exact track of them. “I am confident, though, that the number of charging stations will multiply,” Vígh said.

Different kinds of charging stations will be set up offering varying speeds of battery recharge. Installation costs can run up to HUF 10 million per station. Calculate double that price for the kind that can serve two cars at a time. However, the cost burden is not the only bottleneck in the project, as experts say that obtaining the necessary permits can take half a year.

In spite of the problems around infrastructure, a set of incentives could help to speed up progress toward e-mobility tremendously. There are already some in force, such as an exemption of a registration tax and of duty for bringing e-vehicles into circulation. And in 12 out of 19 major Hungarian cities, there are no parking fees charged for them, either.

But according to the Jedlik Ányos Cluster, more such helpful measures are desperately needed. State-subsidized loans for buying e-vehicles and tax breaks should be introduced. More importantly, from the point of view of overall numbers, e-vehicle fleets should also be eligible for funding. Allowing these vehicles to use the bus lane is on the agenda too.

The government certainly has an incentive to do more toward promoting e-vehicles in Hungary, as billions of euros in EU funding is available for initiatives that encourage greener transport, including through e-cars. Furthermore, it could silence critics who say the proposed enlargement of the Hungary’s Paks nuclear power plant will produce too much unwanted electricity. A lot of e-cars could presumably soak up at least some of that extra supply.