Ukraine’s electric car ownership keeps accelerating, making it one of the fastest-growing markets in Europe.
Ukraine is in the top 12 European countries by total amount of electric vehicles. The country is also in the top five European countries by growth in the number of electric vehicles in the first seven months of 2019, according to market research firm IRS Group. The country’s total number of electric vehicles grew by 37 percent since the start of the year.
“We are seeing serious growth,” said Ivan Lubarsky, the director of IRS Group.
In the first eight months of 2019, almost 4,800 electric cars were registered in Ukraine, 1.5 times more than the same period last year, according to car business association Ukrautoprom. More than 90 percent of these were passenger cars and the rest were commercial vehicles. There are currently about 15,500 electric cars in the country.
The majority of these vehicles remain secondhand imports from the U.S. Most are several years old. Much of the country’s existing charging stations are too weak to reliably charge the higher-capacity batteries of newer electric cars within a reasonable timeframe, say experts.
Businesses and consumers are looking for incentives to grow the market. A series of legislative incentives have already percolated through parliament, including the cancellation of customs duties and value-added taxes on EVs, auto insurance rates reduced by 10 percent, and green license plates and specialized lanes and parking areas for electric vehicles (and fines for internal combustion vehicles that park in them).
Yet the EV industry says that more ought to be done. Legislation that would have introduced some of the most potent benefits for importers and domestic manufacturers languished in parliament. Furthermore, experts say, the existing body of law is not specific enough when defining electric vehicles, leading to ambiguities down the line.
What people buy
The Nissan Leaf remained the top-selling electric vehicle in Ukraine in 2019, controlling over half of the market, according to the Federation of Employers of the Automotive Industry. The relatively cheap vehicle, largely imported from the U.S. is a favorite of EV seekers on a budget.
About a quarter of the electric cars that Ukrainians are buying are four years old, according to the Association of Electric Vehicles Market Participants director Arsenii Abduraimov. Vehicles that are one year old and less than a year old comprise seven and six percent of the market, respectively.
Still, new car imports and the more upscale segments of the market are slowly gaining. Tesla’s total market share is improving, reaching 12.4 percent in the first half with its Model S. Behind it are BMW with 6 percent and Renault, with 5 percent of the market. Fiat overtook Mercedes-Benz for fifth place in terms of brands purchased, according to Federation statistics.
In the commercial segment, the Renault Kangoo accounted for almost all registered vehicles in 2019, according to Ukrautoprom.
Igor Kovalev, the head of the STRUM network of fast-charging stations, said that previously, the market had consisted primarily of mid-range used cars but he is seeing the development of a more complex market. “The growth segment of relevant alternatives — Hyundai, BMW, Renault, is a positive signal. As is the development of the premium sector, for example Tesla, Jaguar and the expected Audi e-tron.”
Petro Rondiak, the head of the management board at Winner Group Ukraine also sees positive signs. Among other manufacturers, Winner Group represents Jaguar, which sells the electric Jaguar I-Pace and expect to complete 2019 with over 130 models sold, with the I-Pace being the top bestseller of new electric vehicles in Ukraine, costing up to 81,090 euros. Next year will see the launch the electric Porsche Taycan in Ukraine.
Some see changing ownership demographics. Buyers previously saw electric vehicles as “the acquisition of a second family car you can charge at home,” and the market was comprised mostly of “connoisseurs of technology and new trends,” according to Kovalev.
“Now, people are getting into electric vehicles for the economy, the image and the emotional component,” he said.
A man plugs a charging cable into an electric car at one of Autoenterprise’s charging stations on Oct. 2, 2019, in Kyiv. (Volodymyr Petrov)
Pluses & minuses
Upfront costs for EVs are in many cases significantly higher than ones with internal combustion. Even the relatively cheap Nissan Leaf, which often comes to Ukraine through auctions after sustaining damage, can cost between $2,000 and $4,000 more than a similar gasoline-powered car.
Nevertheless, there are advantages. Lubarsky said that recharging is ten times cheaper than refueling. He added that electric cars go to service stations considerably less frequently than internal combustion models. Depending on use, an electric vehicle’s savings can compensate for the cost difference within several years.
Laws & infrastructure
One limiting factor on continued growth is the lack of infrastructure. While Ukraine’s charging stations are rapidly expanding, there are relatively few superchargers that are needed to accommodate newer EV models with higher capacity batteries, according to Abduraimov. This prevents some of the top players from entering the market.
Lubarsky added that the other issue is not the number of charging platforms but the limited number of locations with reliable access to high-voltage electricity.
Abduraimov also said that the current body of law that defines benefits also poorly defines what is and is not an electric vehicle and needs to be more rigorous.
A bill introduced in September would help stimulate the EV market in several ways. The first would simplify the process of getting land, setting up charging stations and strip away onerous licensing requirements for providing electricity. Another would allow EVs to move along lanes designated for public transport. It would also consider the creation of 0 percent loans for the purchase of electric vehicles. The Federation of Employers of the Automotive Industry supports these steps, according to an email by deputy director Evgenia Kurchavova.
Multiple associations want to see further stimulation for domestic manufacturing. While Ukraine has almost no homegrown manufacturers of electric vehicles above the hobbyist level, the country has a substantial industry producing equipment, charging stations, EV components and commercial transport. Several experts said that Ukraine has greater potential for commercial EV rather than personal vehicles.
“Lawmakers tell us: ‘there’s no manufacturing here, what are we going to stimulate?’” said Abduraimov. “And we tell them without stimulation, there will be no manufacturing.”
Kurchavova wrote that the government should exempt the import of equipment and components used in manufacturing EVs from Value-Added Tax.
