The Love of Ukrainians for Electric Cars is Stronger than War

The first electric cars were registered in Ukraine in 2012. Then the Ukrainians imported only 7 of these cars. Since then, the import of electric cars to Ukraine has been increasing every year. In 2022, this figure reached another record. Despite the war, imports of electric cars increased by 56% compared to a year earlier and reached 13,321 vehicles. The dynamics of this process can be seen in the table.

From 2012 to 2022, 48,293 new and used electric cars were imported to Ukraine. During the same period, 1463 electric cars were decommissioned or exported to other countries. As a result, at the beginning of 2023, 46,830 electric cars were in operation in Ukraine.⁽⁴⁾ This is 6690 times more than in 2012!

Electric cars are not produced in Ukraine. Therefore, car imports are the main driver of market development. Even after 10 years, transactions with imported electric cars account for more than half of the total turnover of electric cars in Ukraine. A smaller part of the transactions takes place with cars already registered in the country.⁽⁵⁾ This is proof that the market is not full of offers. Therefore, the market will continue to grow. The Ukrainian authorities contribute to this.

Thanks to the actions of officials, electric cars have become the most privileged class of cars in Ukraine. A preferential excise tax was made for the import of electric cars. This payment is 1 euro per 1 kWh of electric storage capacity. This makes the total payment less than 100 euros. Also, customs duties and VAT have been cancelled for the import of electric cars.⁽⁶⁾ There is no need to pay a pension fee.⁽⁷⁾ Thanks to administrative measures, almost all associated payments have been eliminated. This reduced the cost of electric cars by 17%.⁽⁸⁾

Current tax laws make buying electric cars more profitable than buying conventional cars. Traditional cars are heavily taxed. This is especially true for the most attractive part of the car market, which is used cars imported from abroad. The lack of attractive alternatives is the second reason for the popularity of electric cars.

When buying electric cars, Ukrainians pay only for the car. While the purchase of conventional cars comes with so many taxes and duties, it seems humiliating to pay this. A comparison of payments for conventional cars and electric cars is shown in the table.

* Paid upon first registration of a car in Ukraine (import)

For a long time, citizens of Ukraine have been demanding the liberalisation of used car imports. However, the government continues to tightly control this business. Only sometimes officials introduce temporary benefits, which can be considered as methods of political influence on the population. In 2022, the Ukrainian government abolished the customs duty on the import of used cars. The promotion was valid from April to June. For these three months, Ukrainians imported 236,792 cars,⁽¹¹⁾ which amounted to almost two-thirds of the 388.5 thousand cars imported for the entire year.⁽¹²⁾ Thanks to the abolition of duties, Ukrainians were able to save US$710 mln (UAH26.1 bln). In difficult times, this improved the mood in society. Love for cars was stronger than war!

Strict regulation of car imports is not the only indirect factor boosting the popularity of electric cars. Another reason is the high price of petrol, diesel, and gas for classic cars. The price of electricity for electric cars is less. This allows owners of electric cars to save on operating costs.

In 2022, the average price of automotive fuel increased by 60% in Ukraine.⁽¹³⁾ This came as a big shock to car owners. December 12, 2023 average national price of automotive fuel in Ukraine:

A-95+ US$1.41(UAH52.00) per 0.26 halon (1 litre)

A-95 US$1.39(UAH51.36) per 0.26 halon (1 litre)

A-92 US$1.37(UAH50.47) per 0.26 halon (1 litre)

Diesel US$1.49(UAH54.79) per fuel 0.26 halon (1 litre)

Gas US$0.77(UAH28.40) per 0.26 halon (1 litre)⁽¹⁴⁾

The price of electricity in Ukraine is US$0.04 (UAH1.68) per 1 kWh.⁽¹⁵⁾ In Ukraine, the most popular electric car is the Nissan Leaf. This machine has a 24 kWh battery. It will take about 8 hours to charge this car with electricity at home. The price of a full charge of Nissan Leaf at home will be only US$1.41 (UAH52). At 100 km. Nissan Leaf requires 10.5 kWh. This is equivalent to US$0.48 (UAH17.64).⁽¹⁶⁾ Even the smallest car requires 0.79 gallons (3 litres) of gasoline or diesel for 62 miles (100 km.) With an average A-92 price of US$1.37, this would cost US$4.11. That is, travel by electric car is 10 times cheaper than by a car that uses the cheapest gasoline. Diesel car owners pay even more. But owners of cars using gas are in a better position. But even they spend more money on fuel than electric car owners. Gas fuel is usually needed 10-20% more than gasoline or diesel fuel.⁽¹⁷⁾ That is, the minimum gas consumption for 62 miles (100 km.) will be about 1.05 gallons (4 litres). The average gas price is US$0.77 per 0.26 halon. This gives a total price of US$3.08. This is almost 7 times more expensive than the price of electricity.

In the coming years, electric cars will be the preferred cars in Ukraine. There is no large-scale production of conventional cars in the country. Cars are produced by only one plant. The volume of this release is several hundred cars per month.⁽¹⁸⁾ Therefore, there are no lobbyists capable of initiating alternative directions for the development of the automotive market. In this situation, the actions of officials look logical.

By restraining the import of used cars, the government of Ukraine is trying to fill the market with more economical and environmentally friendly electric cars. The government of the country has developed a whole programme for the development of electric transport. Officials plan to start the production of electric cars in the country. The ultimate goal of this plan is to increase the share of electric transport up to 75% by 2030.⁽¹⁹⁾