Government project to create Polish electric car 96% behind schedule, finds state auditor

The government’s plans to produce a Polish-made electric car are lagging hugely behind schedule despite receiving hundreds of millions of zloty in public funds, the Supreme Audit Office (NIK), a state body, has found.

NIK says that progress on the project has reached only 4% of where it was supposed to be by now. Despite an initial plan for the first vehicles to be produced in 2023, the firm overseeing the project has not yet even secured a site for its factory.

Przyznanie przez Premiera 250 mln zł z Funduszu Reprywatyzacji spółce ElectroMobility Poland na stworzenie Izery było działaniem nierzetelnym i niosącym ryzyko niegospodarności, ustaliła NIK. Inwestycja jest realizowana z kilkuletnim opóźnieniem: https://t.co/BKFwftUoaT pic.twitter.com/N5q8JuqbS5

— Najwyższa Izba Kontroli (NIK) (@NIKgovPL) September 20, 2023

The government unveiled details of Poland’s first Polish electric car brand, named Izera, in 2020. Two years later, the state-owned firm responsible for the project, ElectroMobility Poland (EMP), signed an agreement with Chinese company Geely to supply the platform for the vehicle.

But NIK found that, despite large-scale government investment – including a 250 million zloty (€54 million) injection in 2021 – the project has “failed to move beyond the preparatory phase”.

There is in fact a serious risk that the project will never be completed, particularly taking into account the highly competitive and dynamic electromobility market, warned the audit office.

“The protracted process may result in the potential market opportunity being rendered obsolete and the product not finding the market demand expected by the company in its plans,” wrote NIK, which audited EMP from January 2021 to August 2022.

A state-led venture to produce Poland’s first home-grown electric car – known as Izera – has chosen China’s Geely to supply the platform for the vehicle https://t.co/ED91IGhBzR

— Notes from Poland 🇵🇱 (@notesfrompoland) November 18, 2022

The auditor – which noted that it cannot publicly reveal the full details of its report due to confidentiality requirements – said that it had “identified irregularities” in the payment of EMP board members – which exceeded the limits set by a general meeting – and in the transfer of 250 million zloty of public funds to the project in 2021.

It also noted that, “at the time the audit was concluded, [EMP] still did not have the rights to dispose of the selected property for the construction of the production plant”.

Yesterday, the Rzeczpospolita daily reported that EMP will only be able to find out next week whether building an electric car factory on the chosen site will be possible.

However, the company’s communications director, Paweł Tomaszek, assured the newspaper that “in late 2023 or early 2024, we will be ready with all the formalities to symbolically drive a shovel into the ground and start the investment”.

The Polish government’s ambitious electromobility plans have made little progress, amid poor implementation and wasted spending, reports the state auditor.

„In terms of electric cars and infrastructure, we are still at the tail end of Europe,” they write https://t.co/qGFFH3pgbF

— Notes from Poland 🇵🇱 (@notesfrompoland) November 10, 2020

In its concluding remarks, NIK suggested an in-depth analysis and assessment of the strategic objectives of the project. This includes, in particular, recalculating the project’s chances of success and analysing market demand for electric car production.

However, in comments sent to the Interia news website, EMP said that NIK’s report contains information that is now outdated.

“Since then, the company has implemented a number of actions – including securing a reliable technology partner, modifying styling, reviewing the core business assumptions, as well as selecting strategic actions – that aim to mitigate the risks associated with securing market demand for Izera,” said the firm.

#Izera. Spółka #EMP tłumaczy się z zarzutów po kontroli @NIKgovPL. Zostanie makieta? https://t.co/ZPjeAN2Nnj

— Rzeczpospolita (@rzeczpospolita) September 21, 2023

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Main image credit: Izera press materials