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Bulgaria moving in right direction on wider EV adoption

Author ETEM Gestamp
Bulgaria moving in right direction on wider EV adoption

ETEM Gestamp is an international company dedicated to designing, developing, and manufacturing aluminium profiles and machined aluminium components for the automotive and industrial sectors. Emmanouil Fountoukis is General Manager of the company and Chairman of the Board of Directors of Automotive Cluster Bulgaria.

How has the automotive industry in Bulgaria performed over the past year, and what key trends will determine its development in 2023?

The automotive industry is one of the fastest-growing sectors in Bulgaria, a trend that will continue in the coming years. Similar to Etem Gestamp, most of the producers are Tier 1 automotive suppliers, producing and delivering directly to the original equipment manufacturers (OEMs). It is not by chance that almost every car in Europe bears at least one part manufactured in Bulgaria. Competitive cost basis, high quality and geopolitical stability are some of the characteristics automotive manufacturers appreciate in the Bulgarian automotive industry. Hence, in response to the increasing demand, local companies will continue to invest in modern production lines and automation solutions aiming to further increase competitiveness through higher efficiency and lower costs. 

The sector is focused on sustainability, which will be a strategic direction for the coming years. The automotive industry is very committed to reducing its environmental impact. Using renewable energy sources in production will help us reduce our carbon footprint. Additionally, automotive companies implement comprehensive sustainability programmes with a broader impact in local communities and the environment. Recycling and waste reduction programmes, usage of more sustainable materials such as recycled plastic and natural fibers in vehicle production, are only some examples of the direction towards which the industry is moving.

Do you expect new market entrants over the next 12 months?

Bulgaria is an attractive destination for new investments for existing but also for potential investors. Although one cannot make safe predictions, there is active interest of new automotive players to enter the Bulgarian market.

According to a recent European Automobile Manufacturers' Association (ACEA) report, Bulgaria saw the weakest annual growth in battery electric vehicles out of the five EU member states in Southeast Europe. What are the main hurdles to promoting EV sales, and do you expect them to accelerate in the coming year?

The electric car market is growing steadily in Europe and booked record sales in 2022. Sales performance of Battery Electric Vehicles (BEVs) depends on different political, economic, social, and demographic factors. We could claim that lower domestic per capita income as well as lack of a robust charging infrastructure in Bulgaria compared to other European countries are two of the main factors affecting sales. 

However, electric mobility is an integral part of the European Commission’s strategy for the achievement of the emissions reduction targets and the objective of being climate-neutral by 2050. The EU's Clean Mobility Package sets out a range of measures to reduce emissions and boost the sales of electric vehicles. Following this general policy, the Bulgarian EV market will change slightly in the upcoming years. We already have several government incentives to encourage EV adoption, including a reduced tax rate for electric cars and installing charging stations nationwide. Additionally, some municipalities offer free parking for electric vehicles. Building on these measures and policies to encourage consumers is a step in the right direction.

What are Etem Gestamp's strategic goals in the Bulgarian automotive sector for 2023?

ETEM Gestamp’s strategy is focused on strengthening its market position in Europe and internationally as one of the most reliable suppliers of extruded aluminum for the automotive market. During this year, we are investing in additional capacity for extruded aluminum components for the needs of specific electric vehicle projects which are starting in the next few months. Aluminum plays a key role in the European Green Deal as a material that ensures sustainability. Its recyclability, light weight, and unique mechanical properties can significantly contribute to a more sustainable European Automotive Sector. Our company has the experience and know-how to take full advantage of these properties, and combined with innovative design, significantly contribute to the automotive sector by offering a wide range of products focused on the reduction of carbon footprint.