In Ukraine, only two percent of all cars sold last year were electric. In a bid to boost sales, Ukraine will not charge a 20 percent value-added tax and will also waive a 109 euro excise tax on electric car imports in 2018.
To advance to Norway position, the global leader in phasing out petrol- and gas-fueled cars, Ukraine has a lot of catching up to do. Most new cars sold in Norway are now electric or hybrid. The benefits of electric cars are still debated. They run cleaner, reducing pollution, and don’t directly use fossil fuels. However, most electricity is still produced by burning fossil fuels such as coal.
But as renewables produce more electricity, the benefits of electric cars are expected to rise. Globally, Bloomberg’s 2017 Electric Vehicle Outlook forecasts that electric vehicles will account for 54 percent of new car sales by 2040.
The idea behind the year-long tax exemption is to make electric cars more affordable to Ukrainians.
“Given that it is a temporary measure, importers will try to make the most of this advantage,” Georgy Ovsyannikov, head of marketing and economic analysis department at Ukravtoprom association, said. “The demand for EVs (electric vehicles) in the domestic market will grow as a worldwide trend and due to increasing prices on traditional fuel. Unfortunately, the demand will be satisfied by imports of used EVs since new ones are still too expensive for the majority of Ukrainians.”
All but 15 percent of the 2,697 electric vehicles sold in Ukraine last year were used ones, mostly brought from the United States. The biggest sellers were Nissan Leaf, BMW i3, Tesla Model S, Ford Focus, and Fiat 500E.
Alexander Kravtsov, director of Kyiv-based dealership ElectroCars, said the tax exemption is a “good signal from the government” that should be extended.
ElectroCars recently bought the latest Tesla Model 3 from one of the first owners in the United States. It is still not officially sold in Europe, but ElectroCars was able to purchase the Tesla vehicle on eBay for over $65,000 to resell in Ukraine. The Model 3 starts at $35,000 in the U.S.
In the first months of production deliveries were limited to employees, investors, and company insiders. Zorilla received his Model 3 last December as Tesla just started deliveries to reservation holders in the U.S. A month later, he put it on sale on eBay and explained in a blog post that it was too small for a family with three kids.
Hyundai, which sells new EVs to Ukraine, sold 30 of its IONIQ Electric model in six months for an average price of $35,000 — $40,000. This year, the company plans to import 100 IONIQs and introduce its latest Kona crossover.
“We hope that more liberal prices on EVs will boost the demand among Ukrainians,” general director of Hyundai Motor Ukraine Gennady Chetverukhin said.
Renault, Europe’s leader in electric vehicle sales, will roll out its ZOE and Kangoo models on the Ukrainian market. The French carmaker had to first install several charging stations compatible with its models in Kyiv, Odesa and Lviv.
More needs to be done. Charging stations can be found in parking lots of every major shopping center as well as at some petrol stations, but most still don’t comply with European standards, Renault Ukraine reported. In Kyiv, with the largest network of 63 charging stations, only 65 percent functioned properly. Renault said it will make another test run by the end of January.
This text was edited to clarify that ElectroCars bought a Tesla Model 3 vehicle before the model’s official sales in Europe.
