Activities of the Hungarian E-Mobility Cluster
Regulation: Incentives, Legal Framework and Business Models
The Hungarian E-Mobility Cluster has played a crucial part in working out the first E-Mobility Action Plan of 2015 that contained both financial and non-financial incentives to establish the market. In line with this, the Cluster offered legal advice and coordinated the legislative process. The first major result in this field was the new legal definition of the “economically friendly” and “zero-emission” vehicles that are entitled, as of September 30, 2015, to have green number plates. (Before that date electric vehicles had not been registered as such, thus there had been no statistical or other records to analyse.) This category includes BEV, PHEV, EREV and FCEV.
The Action Plan also included the common work of our member companies in planning the basic charging infrastructure on the hand, and the new and intelligent system of measuring the electricity used for charging and a (financial) clearing mechanism on the other. The Action Plan required the minister of national economy and the minister of national development to provide the basic charging infrastructure on the one hand, and to provide a new and intelligent system of measuring the electricity used for charging and a (financial) clearing mechanism on the other.
Meanwhile, the Budapest Metropolitan Assembly has voted unanimously in favour of free parking of the “green” vehicles in the whole capital in the next two years. Since then more than fifty Hungarian municipalities have also introduced free parking for this category of cars.
Since then, the Cluster has focused on the regulation issues in close cooperation with those of its Members that are market players. The utmost task is to formulate the possible business and market models so that the companies involved could evaluate their investment needs. In that context, the Cluster integrates the positions of its Members regarding the market, proactively conducts dialogue with the regulating offices and government bodies.
Devising the Concept of the National Charging Infrastructure
In 2016, at the request of the Ministry of National Economy, the consortium consisting of the BME Budapest University, KPMG and the Cluster has formulated a unified concept for the future charging infrastructure in the whole country.
Coordinating Research, Development and Innovation Activities
Since the nascent e-mobility sector is very dynamic in all the EU countries, the Cluster has faced a growing demand from its members to explore the possibilities for closer international cooperation with partner organizations. We are actively involved in this exchange process: we organize workshops, seminars and conferences. Furthermore, in concord with our members we participate in different matchmaking events and roadshows. We have a vivid cooperation with other clusters in this field (INNOSKART, Smart Future).
The basic aim is to identify those areas where our members can have access to new technologies. This is why we put a special emphasis on strengthening cross-sectoral cooperation, like involving university-based research programs and corporate development needs. In this segment we also pay special attention to the possibilities of dual education.
Since April, 2017, the Cluster has also been involved in the work of the National Mobility Platform that aims to unify the R+D+I activities in all aspects of vehicle development: Autonomous, Connected and Electrified.
Offering Consultancy to Secure Financial Sources
Another area of our activity is the regular dialogue with the decision-makers on the one hand, and the actors of the e-mobility sector. Since large-scale development projects are predominantly financed from state and EU sources, we do our best to help firstly the planning process. On the international level, we are involved in coalition-building and matchmaking with other partner organizations in different EU Member States, in the framework of the Horizon 2020 program.
Social Values in our Focus
It is also of great importance for us to highlight the social and environmental impact of our activity. Hungary has a sophisticated and competitive light electric vehicle industry. The two and three-wheel vehicles (including e-bikes and pedelecs) are rightly considered healthy means of transport. In this segment, the Cluster has organized a working group to deepen the common thinking between the producers of light electric vehicles, the potential users and the public sphere.
Workshops and Conferences
The Cluster is active in disseminating up-to-day and in-depth information on the state of e-mobility not only in Hungary but also globally. During the first period of shaping the national e-mobility strategy, all relevant issues were discussed by the three permanent Working Groups (Legal, Transport, Innovation) convened regularly. In March 2015, a special additional Working Platform was established to deal with the issues of the Light Electric Vehicles. The LEV WP, however, did not have regular meetings.
Due to the new challenges, however, the activity of the Cluster underwent major changes in late 2017. We felt a growing demand from our members and partners to provide a practical horizontal approach, thus making it possible that actors from different industries should cooperate more effectively over a wide range of issues. Instead of separated working group meetings, we regularly organise common workshops for all interested parties to explore specific areas and problems: regulation, charging technology, standardisation, automotive development, etc.
At the same time, the JÁT Hungarian E-Mobility Cluster is one of the most active and dedicated organisations to provide and share knowledge on electric and intelligent mobility. The Cluster is a regular participant of national and international conferences and seminars. We are proud of our annual national e-mobility conference that has already become a benchmark event for the sector. In June 2018, the 3rd such conference (in a traditional cooperation with the REKK Regional Energy Research Center of the Corvinus University of Budapest and the KTE Transport Science Association) took place.
The Current Electric Vehicle Market in Hungary
Cars: Before November 2015, there were no exact statistics of electric vehicles in Hungary. The only information available was that, according to the Hungarian Statistics Office KSH, at the end of 2014 there were more than three million (3 107 695) M1 category passenger cars in the country; it was only estimated that the number of EVs was in the range of about a hundred cars.
The latest official figures suggest that, by September 2018, more than 7,000 electric cars (i. e. roughly 0,0022% of the total car stock) have been registered with green number plates. The proportion of BEV and PHEV vehicles in this group is dynamically changing, as among the newly registered EVs the share of fully-electric vehicles is about 80%. Sales have been growing steadily since 2016.
Growth in the E-Car Market: There are different estimates relating to the dynamics of the e-car market, but most agencies are expecting rapid growth. PricewaterhouseCooper, for example in its May 2014 report forecasted that by 2023 there will be more than 52 000 (fifty-two thousand) electrically chargeable vehicles in Hungary.
In November 2016, the Hungarian government sent its national policy framework for the implementation of the EU Alternative Fuel Infrastructure (2014/94/EU) to the European Commission. This document, on page 6 indicates that by 2020, the number of EVs will be between 12.000 and 53.000 according to three possible scenarios.
(For further details the document is available in Hungarian at: http://www.kormany.hu/download/a/0c/e0000/A%C3%9CINK_fin.pdf )
State and Public Aid: The government has also announced that significant public procurements will be conducted to broaden the use of e-cars of state-owned or municipal organisations. Government loans were offered to municipalities that intend to deploy charging facilities, and there is an ongoing programme offering 21% price reduction for those who purchase new BEVs. (Ministries, for example, are expected to buy electric cars, and big public service entities, like the Hungarian Post have already announced their plans to procure e-vehicles in major cities. These entities can rely on a state-financed public procurement scheme.)
Public Transport and E-Buses: Public transport is also considered as a significant breakthrough area. Hungary has great traditions in bus manufacturing, as during most of the 20th century it was one of the biggest bus producers in the world. On the basis of the former Ikarus bus factory facilities a new company has been set up recently focusing on “new energy vehicles”. The MABI company (a member of the Cluster) produces vehicles with full electric, CNG and – in the future – hydrogen fuel cell power trains while the body is made of glass fibre composite material. This new generation of buses can be the backbone of the e-mobility drive in public transport in Hungary. The first batch (20 vehicles) of these innovative “Modulo” buses started their service in downtown Budapest in 2016.
Car Sharing: The first car-sharing service provider, GreenGo Ltd. (a member of the Cluster) started its commercial operation in Budapest also in 2016. It is expected that other providers may soon enter the market in the capital. According to the BKK Budapest Public Transport Authority, at least six car-sharing operator companies are planning the market of the Hungarian capital. In early 2018, the MOL Hungarian Oil and Gas Company (also our member) launched its own car-sharing subsidiary, LIMO in the capital. Since then, an e-scooter sharing service has started, as well.
Light Electric Vehicles: Last, but not least, Hungary has a sophisticated and competitive light vehicle industry. The two and three‐wheel LEVs have a well-proven potential in urban mobility, freight delivery, commuting and health protection. There are four major OEMs in Hungary that manufacture e-bikes and pedelecs, mainly to export them to the EU market The output is about 200,000 LEVs a year.) The Cluster is proactively engaged in the preparation of a government program aimed at supporting the widespread use of LEVs.
Initial Charger Deployment: The first steps of providing charging opportunities for e-car drivers were motivated by EU programmes like the “Green Vehicle Initiative”, and the business participants were guided mostly by promotional and marketing considerations. The German-owned electric utility company RWE-ELMÜ, for example, set up the first public charging points in Budapest in 2010, and the MOL Hungarian Oil and Gas Company at one of its premium-category filling stations. Since then, the process of the setting up of charging stations has been rapidly accelerating: currently, the network of the publicly accessible charging stations in Hungary consists of 200 normal-power AC and 66 high-power DC (50kW plus) charging points.
2018, however, has brought a significant breakthrough, as the several partners started to deploy normal and high-power chargers nationwide. Municipalities and state institutions also have the opportunity to apply for subsidized grants to procure EVs and charging equipments. Thus, it is expected that the national public charging network combined (including the fleets of MVM/NKM, MOL, RWE ELMŰ, e-Mobi, OMV, Lukoil) is to reach the 1,000-unit level by 2019.
In the meantime, an estimated 400 charging points are operational in private areas (for example, parking houses, supermarkets, hotels and business areas).
The Specific Segment of the Hungarian National E-Mobility Strategy: Automotive Industry – Competitiveness and Digitalization with Global Outlook
Hungary belongs to the major automotive industrial nations inside the EU, as there are three car-making plants (Audi, Mercedes, Suzuki), three global companies with high-tech automotive production facilities (GM Opel, Bosch and Continental) and about 300 vehicle component producing ventures present in the country. Recenty, it was announced that BMW will also build a state-if-the-art car factory in Eastern Hungary. All the important players have given positive signs about their possible involvement in e-mobility. Audi has recently started an e-mobility research and development programme at its plant in Győr. Mercedes-Benz has announced the opening of its second plant in Kecskemét where electric vehicles will be also produced.
Therefore, the Hungarian government is aware of the importance of the automotive sector in terms of its contribution to the Hungarian GDP, the labour market and the export, as e-mobility offers a unique opportunity to increase the innovation ability and competitiveness of the actors in this sector. The disruptive change in the transformation process of all the automotive, transport and mobility sectors will sharply influence the perspectives of the Hungarian stakeholders.
In line with the EU efforts, Hungary has also recognized the importance of the electric vehicles as ideal platforms for further digitalization of transport and the economy as a whole.
As it has been already mentioned, the Hungarian bus industry may be a beneficiary of a successful e-mobility strategy, as the rolling stock of the Hungarian public transport companies is extremely outdated, its replacement cannot be delayed any longer.
Impact on the Energy Sector
Until recently, energy companies have shown limited interest in e-mobility, but the announcement of the “Ányos Jedlik Plan” (JAT) electrified their involvement. One of the early key players has been the state-owned MVM Hungarian Power Company which is responsible for providing the safe supply of electricity for all users and customers. According to the latest information, both the government and MVM management
The latest “Winter Package” (November 2016) of the European Commission, however, highlighted the special role of the distribution system operators, (for example E.ON and ELMŰ-RWE) which have also devised their strategies to meet the new market challenges.
Equally, the national MOL Hungarian Oil and Gas Company is showing keen interest to deploy electric vehicle rapid charging points along its filling station network.
From the technology point of view, e-mobility is a challenge for the energy companies along the supply chain, because charging solutions are developing very fast, and it is expected that power demand will also grow.
The Information and Telecommunication Sector
The other sector that is closely examining the opportunities offered by the e-mobility drive is informatics. There is a considerable degree of synergies between the earlier “Smart City”, “Smart Grid” and “Intelligent Transport Systems” projects that secures the necessary knowledge for further development. Once again, it may be a competitive edge of the local IT-companies that they have great experience in public infrastructure projects. Potential investors and business partners are already engaged in this field.
It is of great significance that the actors of the Hungarian ICT-industry be engaged in the latest mobility-related developments, including the autonomous driving, the connected vehicles and the electric powertrain (together with the hydrogen fuel-cell technology). Moreover, the future “e-mobility service providers” also need highly sophisticated solutions for their business models.
Another serious challenge for the Hungarian ICT-sector is the rapidly growing demand from other industries. In this context, the huge volume of ICT solutions required by the automotive and transport industry is a key factor.
Research and Education
Special importance is given to the role e-mobility can play in the shaping of modern education, especially in the technical field. It is evident that a great number of specialists will be required in the near future, so vocational training and academic engineering curricula need to be modified.