Why Isn’t Tesla Selling EVs in Russia?

With no Tesla stores in Russia – and no current plans to add one – some Russians are going to great lengths to buy a Model S.

Software executive Andrey Vratskiy was so motivated to own a Model S that he purchased one from the U.S., then spent an additional $12,000 to fly it to Russia and $50,000 to clear customs.

He isn’t the only wealthy Russian paying almost double to buy a Tesla, reported Automotive News. And this year, Russia’s luxury car market could surpass $2.6 billion if sales trends from the first half of the year continue, according to calculations from market research firm Avtostat.

That’s much smaller in comparison to the $100 billion luxury car market for the U.S., but some Russians are still questioning why Tesla isn’t making moves to add a store within the country.

So why isn’t Tesla considering a Russian store?

Customer Support

For Tesla, the issue is more complicated than simply opening up a store like a conventional auto dealer. In order to honor the company’s standard inclusions, Tesla would need to provide its proprietary charging, warranty support, service and other customer assistance to Russian buyers.

Currently, the nearest Tesla service center for Moscow, said Automotive News, is about 550 miles away in Finland.

Low EV Adoption Rate

Market and consumer researcher Gfk said only 10 percent of Russians would consider buying an EV, even though 72 perent have a favorable opinion of them.

Alexander Kissov, the head of Gfk’s automotive and mystery shopping division in Russia, said an inadequate charging infrastructure and lack of knowledge on EVs are holding Russians back from buying.

“To be successful with EVs in the Russian market, the Russian government and car manufacturers should make a joint effort to address these concerns,” said Alexander Kissov, who leads Gfk’s automotive and mystery shopping division in Russia.

“That said, a high number of consumers in the market for a luxury small car in Russia (81 percent) are open to considering EVs,” said Kissov.

SEE ALSO: Tesla Model S Crosses 50,000 U.S. Sales Milestone

The X Factor

One of the other underlying issues blocking a Tesla store may have nothing to do with autos at all. Elon Musk, the CEO for Tesla Motors, is also the head of rocket and space technology company Space X.

Following Russia’s invasion of Crimea, Musk spoke out against Space X competitors that used Russian-made rockets.

In the end, “[Space X] won U.S. Air Force certification in May to conduct military missions,” said Automotive News, “while a joint venture of rivals Boeing Co. and Lockheed Martin Corp. is being limited because of political pressure over its use of Russian rockets.”

These connections between Russian rockets and Space X may be enough reason for Tesla to think twice before opening a store on Russian soil.