Policy favours for electric transport in Ukraine

Caring about the environment is a number one priority in the whole world. Ukraine is actively supporting this development. The government is adopting new laws to inspire citizens to consider electric vehicles as personal transport for everyday use. We will now discuss which policy favours and incentives exist today and what they will bring us in the nearest future.

Incentives that have been adopted and are now in force

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The government's first important decision was to waive import customs duties for electric vehicles adopted on January 1, 2018. This brought the prices down and the flow of EVs to Ukraine grew up. This incentive was continued till 2023, which led to the increase of EV market, sales more than doubled in the first year (56%) and continue to grow until now.
In 2018 and 2019 the number of electric vehicles soared from 500 to 12,600 vehicles, while the number of charging stations for them all over the country reached 17,000. In 2021 about 27,000 electric vehicles drive the roads of Ukraine.
EVs are transported from Odessa to Kyiv.
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At the beginning of 2019 Ukraine introduced a new requirement to all parking lots. Now all of them need to have no less than 5% of parking slots ready to be equipped with charging stations for electric vehicles. This requirement stays in force in 2021, being an effective instrument stimulating installation of new charging stations.
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In the middle of 2019 the Verkhovna Rada (Ukrainian Parliament) voted in the draft law 10405 On providing access to the charging stations infrastructure for electric vehicles. This law sets fines to be imposed on drivers of vehicles with internal combustion engines, if they park in the slots intended for electric vehicles. The size of such a fine is 20 to 30 non-taxable personal incomes (calculation base), i.e. 340-510 UAH. Parking inspectors have the right to call a tow truck that will take these vehicles to the impound lot. The draft law came into force in 2020 and is still active.
However the law does not really change the situation due to the absence of administration and timely punishment. It happens that parking slots are often taken by vehicles working on fossil fuels.
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The end of 2019 brought a new development — “green” license plates that will be issued at the Ministry of the Interior Service Centers during registration of electric vehicles. Additionally, legislation dictates that EV owners get a 10% discount for third party liability insurance.
The government has also done a lot for the manufacturing of electric vehicles in Ukraine. There is no VAT on component parts for EVs. Kyoto Protocol signed in 2004 pushes countries to speed up the switch of their public transport to electric power by setting specific targets to limit and reduce greenhouse gases emissions into the atmosphere. Committing to this initiative in 2021 Ukraine will purchase 17-20 modern electric busses together with charging stations for them to be installed in vehicle parks.

Acting methods of stimulating the market:
  • abolition of import customs duty;
  • 10% discount for third party liability insurance for EVs;
  • 5% of parking slots at all parking lots must be equipped with chargers for electric vehicles;
  • fines for fossil fuel vehicle drivers who park their vehicles at slots intended for charging EVs;
  • “green” licence plates;
  • ratification of Kyoto Protocol that commits countries to switch to electric public transport;
  • no VAT on component parts for manufacturers of electric vehicles and infrastructure for them.

Initiatives and plans

Despite active development of electric transport and infrastructure in Ukraine, the government is too slow to introduce incentives that will be more effective. A number of promising draft laws never received support.
In 2019 a suggestion was expressed to allow EV drivers free parking, driving on lanes segregated for public transport and even driving faster on highways. However this initiative was declined by the Ukrainian Parliament.
Proposals 8159 and 8160 to compensate 18% of the cost of EV (VAT) paid by a Ukrainian citizen were not supported either.
Those proposals also suggested that manufacturers of electric vehicles and component parts for them will be exempt from income tax for ten years.
It was also planned to install mandatory charging stations for electric vehicles when reconstructing old gas stations or building new. It is already the second year that the project is under development.
Draft law 2054 meant to abolish the fee that went to the Pension Fund at the moment of purchase of a new EV. The draft was not supported, the fee still equals 3-5% of the cost of an electric vehicle.
That same draft law suggested a simpler mechanism for allocating land slots for EV charging stations, as well as absence of the license for selling electric energy intended to charge vehicles with electric power. The draft was deemed as conflicting with public interests, it gained no support from the Parliament and was rejected.
An electric vehicle while charging
Proposals rejected:
  • free parking;
  • driving on lanes segregated for public transport;
  • no VAT at registration;
  • no income tax for manufacturers for 10 years;
  • simpler procedures for connecting and registering charging stations.

Plans for a complete switch to electricity

Meanwhile the EU is turning to green transport much faster and the process gets much more support from member countries. Thus, Norway exempts electric vehicles owners from any fees and duties, they do not pay for parking and using toll roads, they get a discount on insurance and credits. In addition, connecting to the grid is tax free for charging stations, the procedure itself is simple.
All European countries, the USA and China provide a compensation of 3 to 9 thousand dollars on every purchase of an electric vehicle. A larger portion of toll roads can be driven for free in Europe, infrastructure is supported by the states.
The goal of this is to transition to electric transport faster and have less impact on the environment. In 2020 large cities closed their gates for vehicles with diesel engines, some of them banned all vehicles with internal combustion engines (Zermatt, Switzerland).
European roads and charging stations at regular gas stations
By 2030 such limitations will be introduced in the majority of EU member states, and by 2040 electric vehicles will make two thirds of the world market. The tendency indicates that Europe will stop using gas and diesel vehicles and will prefer alternative sources of energy, the same development is expected of industry.

Incentives active in the EU:
a compensation of 3 to 9 thousand dollars of the costs depending on the country;
a ban for diesel cars and sometimes cars using gasoline to enter cities;
free parking;
free use of toll roads;
driving on lanes for public transport;
simpler process of installing charging stations.
Following that Ukraine has already prepared several draft laws, they are related to a prohibition on importing and registration of vehicles with internal combustion engines and are now in the process of drafting.

For example, one of them outlines state policy on incentivising development of electric transport. However it does not talk about infrastructure development, simplified procedures for installing charging stations and modernisation of electricity networks.
Another document suggests prohibiting import and first registration of diesel vehicles as early as 2027, in 2030 banning all vehicles with internal combustion engines and converting all transport driving the country’s roads electric.

Oleksandra Ershovs

Media content editor

A journalist of automotive medias with more than 10 years of experience; an active participant in the European e-mobility movement. She is sure, that technology can serve the ecology.