Bulgaria doesn't have the best track record with car manufacturing, as the latest example with Volkswagen from 2019 showed. Now, however, the country has an opportunity to turn the tide with something larger than the manufacture of automotive components. On July 10, the caretaker government signed a memorandum of cooperation with German e-car startup Next.e.GO Mobile which will invest a total of 140 million euro in a manufacturing plant in the city of Lovech, creating 1000 jobs in the process and thousands of others for subcontractors.
According to caretaker economy minister Kiril Petkov, talks with the German startup began just five weeks ago. The company chose Bulgaria over three other countries in the region promising larger incentives. Bulgaria won't be handing out money in advance, Petkov said, adding that the subsidy could reach 34 million euro only if certain production targets are met. According to sources of Capital Weekly, the subsidy will be given out bit by bit: when the plant is built, when the total number of employees is hired, and when certain production milestones are reached (10000 and 20000 e-cars per year).
The plant will be located in the nearly abandoned Balkan machine manufacturing facility, a property of the Domuschiev brothers who also own various other businesses including in pharmaceuticals and media. Production is expected to begin as early as 2024, and currently, the company's planning to produce about 30,000 electric cars per year.
Plenty of subcontractors
According to Petkov, Next.e.GO Mobile's decision was influenced by the cluster of subcontractors present in Bulgaria. For example, the aluminum frame for the eGo Life model, which will be produced in Lovech, will be supplied by the Bulgarian plant of aluminum extrusion products maker Etem. The car's software package will be developed by a Bulgarian subsidiary of Germany-headquartered group Robert Bosch; the cable and wiring systems - by Yazaki Bulgaria. The local division of Next.e.GO Mobile will be managed by Lyubomir Stanislavov, CEO and member of the board of Automotive Cluster Bulgaria.
Investor.bg quoted Ali Vezvaei, chairman of the management board of Next.e.GO Mobile, as saying that Kiril Domuschiev is a co-investor in the project and will become member of the board of directors at the Bulgarian division of the company.Pricing for the eGo Life model which will have three versions will start at 20,000 euro. One charge will secure a mileage of about 200 km.
The company is looking to export the cars all over Europe in the future. But, as a startup, it will have to work with private investors to finalize its projects. Only after that would state support come into the picture. In February, Next.e.GO Mobile raised more than 30 million euro in a funding round led by the Moore Strategic Ventures fund, along with former US Treasury Secretary John Snow and actor Edward Norton. At the outbreak of the pandemic last year, the company encountered financial difficulties but was bailed out by the ND Industrial Investment fund which became a majority shareholder in the startup.
Next.e.GO Mobile was founded 6 years ago in Aachen under the name e.Go Mobile by university lecturer Günther Schuh, whose previous startup for electric vans StreetScooter was acquired by Deutsche Post.