Georgia’s EU bid stepped up with new electric car manufacturing plant

The city of Kutaisi in Georgia hopes to put itself at the forefront of global automobile production with the opening of an electric car factory that plans to produce 40,000 vehicles a year.
A construction memorandum was signed in May by the Georgian industrial holding AiGroup and Changan, a Chinese state-owned vehicle manufacturer. The Changan corporation is the largest electric car manufacturer in the world, and has partnerships with Ford, Volkswagen (DE:VOWG_p), Volvo, Mazda and Suzuki.
Georgia’s Prime Minister, Mamuka Bakhtadze, is enthusiastic about the project: “This factory will open a new chapter in our economic history. It will have a very positive influence on our economic structure, by creating more than 2,000 jobs and – at the same time – will help us to increase our export potential.”
The plant will be the first of its kind not only in Georgia but the entire South Caucasus region, and will sit on 100 hectares of land on the outskirts of Kutaisi. In addition to the manufacturing plant, it will comprise facilities for painting, welding and the construction of solar panels.
Initially the factory will contract 300 workers, with a view to producing 5,000 cars in the first 18 months. This will increase over time, with future plans to provide 20,000 cars to the domestic market and export another 20,000 to the European Union.
The green economyThe AiGroup is groundbreaking in the region for its environmentally friendly initiatives, and its various arms – AiCar, AiEnergy, AiPower and AiProduction – are responsible for, respectively, car sharing; charging stations; solar panels and power stations; and electric vehicles.
This focus on green projects has won the group a lot of support in the region, along with partial state-funding for the Kutaisi factory. The Prime Minister emphasised that “The green economy concept will be a driving force of the national economy,” while Minister of the Economy Natia Turnava said “The project is unique for us, and makes Georgia a pioneer in the region in terms of production of eco-friendly green technologies and electric vehicles.”
She also spoke of Georgia’s wish to replace its car fleet over time with these new and environmentally friendly cars, which will be rolled out in tandem with an expanded car-sharing service and further installation of solar-powered charging points around the country.
Georgia on the world stagePost-Soviet Georgia identifies very strongly as European, and has long had accession ambitions with regard to the European Union. With this in mind, production standards at the new factory will closely correspond to EU regulations.
Since 2014, the existence of an Association Agreement with the EU has meant closer bonds between Georgia and the member countries, with a pact on free trade. Positioned on the Black Sea between Russia and Turkey, the country is regarded as strategically useful as a gateway to Asia.
It has also, in recent years, become popular as a tourist destination, with more and more westerners discovering the country’s green mountain ranges, warm and welcoming people, superb food and wine, and a wealth of architectural styles spanning several centuries.
Low-cost international flights into Kutaisi’s airport have put the city firmly on the tourist map, as has the Gelati monastery, founded in 1106 and now a UNESCO World Heritage Site, and the 11th-century Bagrati cathedral. A large and vibrant food market is another major attraction for visitors, while just outside the city is the Prometheus cave, an extensive underground karst complex with 22 halls.
Kutaisi’s automobile heritageThe roots of the new Kutaisi factory were planted several decades ago, when the city was home to the Soviet Union’s first ever car manufacturing plant. Construction started on the factory in 1945, with the first truck, the ZIS-150, created in 1951.
The production of the AiGroup’s electric vehicles will mark a welcome return to the industry, honouring the local heritage with a superior product. Design plans for the first four models to come off the line were conceived by award-winning industrial designer Zviad Tsikolia, and while these are expected to become the best-selling of Georgia’s exports, they have also been developed to be affordable to local residents.
For Natia Turnava this is a rebirth of which the city can be proud: “Kutaisi is famous for its industrial traditions. By implementing this project Kutaisi will regain the status of a machine-building capital.”

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