How quarantine in Ukraine has affected the electric vehicle market
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How quarantine in Ukraine has affected the electric vehicle market

Date:11.04.2020

Since the introduction of quarantine due to the Covid-19 pandemic, all car dealerships have been closed in Ukraine, leaving only petrol stations and service stations open. The business has completely switched to online car sales. There have been significant problems with the delivery of cars from abroad, and car markets and commission platforms where you could look at and buy used cars have been closed. Car certification bodies have also ceased to operate. З [...]

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    Since the introduction of quarantine due to the Covid-19 pandemic, all car dealerships have been closed in Ukraine, leaving only petrol stations and service stations open. The business has completely switched to online car sales. There have been significant problems with the delivery of cars from abroad, and car markets and commission platforms where you could look at and buy used cars have been closed. Car certification bodies also ceased to operate.

    Since 2 April 2020, the Cabinet of Ministers has approved Resolution No. 255, which states that car dealerships, service stations and certification bodies can operate again. There are some relaxations, but quarantine, self-isolation and the economic crisis have not disappeared, but are only getting worse. In this article, we will discuss the present and future of the electric vehicle market.

    What factors influenced the sale of electric vehicles in Ukraine

    There is no business in our country that has not been affected by the pandemic and the quarantine imposed because of it. The automotive business is no exception. And even the fact that car dealerships can now operate not only online hardly changes the situation.

    As a result, sales of electric vehicles are falling:

    • You cannot register a used car - during the quarantine period, only new cars can be registered at the service centres of the Ministry of Internal Affairs of Ukraine. This is a serious problem for the electric vehicle market, where the share of used cars is about 90%.
    • Purchasing power has declined - uncertainty and panic have made buying a car less of a priority.
    • Volatile exchange rate and hryvnia depreciation - people are in no hurry to spend their savings.
    • Electric vehicle production facilities closed - The coronavirus pandemic has caused a global crisis that has forced some automakers to suspend production of new models.
    • Difficulties with the supply of electric vehicles to Europe - delivery dates have been postponed indefinitely and no new models are currently being delivered to the European market from the US and Korea.

    In China in February 2020 sales fell by 79% compared to January. Sales of the largest automaker BYD decreased by 80% compared to 2019. The story is the same for many other companies: BAIC BluePark (65.1%), Chongqing Changan Automobile (73.3%), SAIC Motor (86.9%). European manufacturers have also suspended production due to a shortage of Chinese spare parts and falling demand.

    What's next

    Businesses are shutting down, car dealerships are empty, people are afraid to spend money - but the market is still continues to growIn March 2020, 409 electric vehicles were registered in Ukraine. The number of registrations decreased by 16% compared to 2019, as most of all electric vehicles are used cars imported from abroad, and they were temporarily stopped from being registered due to quarantine measures. Despite all the restrictions, registrations are still taking place - in the first quarter of 2020, 1.7 thousand new electric vehicles were cleared and registered, which is 1/3 more than last year.

    There is hope that if the quarantine is lifted in May, the poor performance of March and April will be offset by later periods of sales growth. People will start to pay more attention to electric cars because they are less expensive than cars with internal combustion engines and allow them to minimise contacts more effectively (no need to stop at petrol stations).

    Some companies offering electric cars to Ukrainian buyers will go bankrupt and close down. The reason is this: those who have purchased a large stock of premium cars in the hope of earning more will have problems with turnover and return on investment, unlike those companies that operate affordable cars ($10-20 thousand). The lack of stable sales and profitability will also cause bankruptcies, as companies will not have the funds to pay rent, maintain staff and existing facilities.

    Currently, there is a small but steady demand for cars in the affordable segment. People see the purchase of an electric car as an urgent need: to move around the city while complying with quarantine rules. The desire to buy a premium car to maintain status has faded into the background.

    At the same time, the demand for car sharing, taxis and vehicles for targeted delivery of goods has increased: these are mainly electric scooters and other small electric vehicles.

    Our recommendations

    • Beware of deception

    Despite the fact that nowadays there is an interesting opportunity to buy an electric car "to order", it is better to give preference to cars that are available. Check the reputation of the companies you entrust your finances to, and pay particular attention to delivery times, which no one can honestly guarantee today. As practice shows, in our country, even a contract and aggressive marketing do not guarantee the safety of your investments.

    • Do not panic

    The epidemiological situation will change, the quarantine will end, normal life in the country will resume, and people will return to the issue of buying a car. In the meantime, follow the quarantine safety rules, try to inform customers as much as possible and provide them with additional services, such as contactless delivery of electric vehicles

    • Take care of yourself and your loved ones - follow the recommendations of the Ministry of Health
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