Tesla Is Getting a Sales Bump in Russia

Nation’s richest, entrepreneurs choose electric, despite duty.

Ilya Khrennikov

17 Jul 2018, 02:58 AM IST

A Tesla Motors Inc. Model S P90D, a model with some autopilot features, is displayed during an exhibition featuring several self-driving cars outside of the Dirksen Senate Office Building in Washington, D.C., U.S. (Photographer: Drew Angerer/Bloomberg)

(Bloomberg) -- Tesla Inc. may nearly double the number of cars it’s selling in Russia after a mobile-phone retailer backed by billionaire Alisher Usmanov unexpectedly added electric vehicles to the line of gadgets it offers.

Svyaznoy, co-owned by Usmanov’s wireless carrier MegaFon PJSC, said it received orders for 236 vehicles in June, the first month it started sales jointly with importer Moscow Tesla Club. This compares with about 300 Teslas registered in the country since 2014.

The uptick in sales comes even as the Californian company lists no stores or Tesla-run charging stations in Russia. Tesla, which hasn’t earned an annual profit in its 15-year history, has struggled to ramp up production of its Model 3 sedan to stem losses.

Buyers selected their Tesla configuration on Svyaznoy’s website, made a prepayment and will get their vehicle delivered to any city where the company has one of its 5,500 handset stores, according to e-mailed statement. About 43 percent of the orders placed were for the Model S sedan, while 26 percent were for the Model X sport utility vehicle, according to Svyaznoy. The Model 3, billed as a more affordable car, and the Roadster were also in demand, the retailer said.

The Teslas may reach Russia within four months after being shipped by sea from the U.S. They are tailored to clients’ requirements at a Tesla factory in the Netherlands, said Igor Antarov, managing partner of Moscow Tesla Club.

Russian Tesla customers are turning to the vehicle despite a retail price 60 percent higher than in Western Europe, mainly because of customs duty, a scrapping fee and other local paperwork, according to Antarov. Still, many local tech entrepreneurs and top managers have signed up to buy a Tesla. In the U.S., the Model S and Model X can each cost more than $100,000. The Model 3, with a starting price of $35,000, is currently delivered only in more expensive versions.

Herman Gref, head of Russia’s largest lender, Sberbank PJSC, billionaire Roman Abramovich and Mail.ru Chairman Dmitry Grishin were among the first celebrity owners of Teslas in the country.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Kim Robert McLaughlin, Phil Serafino