Electric Car Market in Ukraine

by Meifan Honcharuk
Wednesday, November 24, 2021
3 MIN

Ukrainians are switching to electric cars en masse. Prospects for the development of the Ukrainian electric vehicle market

The advantages of an electric car

There are many advantages of such transport, and we will consider the most important of them below.

  1. Environmental friendliness and no exhaust fumes. Electric vehicles do not use petroleum products, antifreeze mixtures, engines and other oils, and, therefore, no harmful exhaust gases are emitted. In addition, this type of transport becomes safer in terms of operation since its fire and explosion hazard is minimized;
  2. Low cost of maintenance and operation. Since electricity is several times cheaper than fuel for cars, the financial savings for the driver are apparent;
  3. High-efficiency factor of an electric motor compared to a gasoline engine. The efficiency of the electric motor reaches 95%, while the efficiency of the fuel engine is only 45%;
  4. Simpler, more affordable, more reliable and safer vehicle design;
  5. Possibility of timely recharging of the engine, both from a high-voltage charger (charging station) and from an ordinary home electrical network;
  6. Low noise level due to the small number of moving parts of the car and mechanical transmission.

Demand for electric vehicles for 9 months of 2021 in Ukraine

846 electric passenger cars were registered only in September. Accordingly, the market grew by 16.4% compared to August and 28% compared to last year.

As a result, 5.854 electric vehicles were registered in 9 months, which is 7.8% higher than the results of the same period last year. At the same time, the share of new electric vehicles is gradually growing and is already 12.8%.

The five most popular new electric vehicles in Ukraine:

  1. Nissan Leaf;
  2. Hyundai Ioniq;
  3. Nissan Sylphy;
  4. Jac iEVS4 and Porsche Taycan;
  5. BMW i3 and Mercedes-Benz EQC.

Cancellation of VAT on the import of electric vehicles

In August 2021, Ukrainian president Volodymyr Zelensky signed laws to increase the share of ecological transport in the country by introducing tax incentives. One of the innovations is the abolition of VAT (value-added tax) on electric cars imported and sold on the territory of Ukraine.

The import of electric vehicles to Ukraine is exempt from VAT until December 31. 2025. The list of vehicles covered by this benefit includes:

  • Light electric vehicles;
  • Electric buses;
  • Electric trucks;
  • Electrical special equipment.

The laws also provide for:

  • In public procurement of vehicles, the share of cars with electric motors should be at least 50% by 2030;
  • Until January 1. 2029, parts and equipment needed to produce electric vehicles will be temporarily exempted from import duties;
  • Until January 1,.2031, imports of goods to Ukraine are exempted from taxation for enterprises that create or modernize their production facilities to produce environmentally friendly vehicles;
  • Until December 31. 2035, the profits of enterprises producing these vehicles, as well as electric motors, lithium-ion batteries and chargers for them, are exempt from taxation.

Can Ukraine produce electric cars?

The production facilities created in Ukraine allow the production of up to 400,000 units of vehicles.

Ukraine has significant raw material potential. The EU noted that Ukraine has 21 out of 30 rare earth elements identified as critical raw materials for the production of devices to develop green energy, particularly batteries.

The exact amount of lithium reserves in Ukraine is classified information, but the State service of geology and mineral resources says that this reserve is one of the largest in Europe.

Ukraine needs to attract foreign investors and adjust export to Europe and other countries. This is the only way this electromobility story has a chance of success.

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