Electric transport privileges in Ukraine

Accepted those existing privileges

The first and most important decision of the authorities was cancellation of customs duties on the import of electric vehiclesadopted on 1 January 2018. This reduced prices and allowed for an increase in the supply of electric vehicles to Ukraine. The extension of benefits until 2023 had a favourable impact on the growth of the electric vehicle segment and sales showed an increase of more than 56% in just one year and are still growing.

Between 2018 and 2019, the number of electric cars increased from 500 to 12,600, and the number of charging stations for them increased to 1,700 across the country. In 2021, there are about 27,000 electrified vehicles in Ukraine.

Since the beginning of 2019, Ukraine has introduced a requirement for all car parks in the country to equip at least 5% car spaces for the installation of charging stations for electric vehicles. And this requirement will be extended to 2021, allowing us to actively encourage the installation of new charging stations.

In mid-2019, the Verkhovna Rada adopted Draft Law No. 10405 "On Creating Access to the Infrastructure of Charging Stations for Electric Vehicles". It defines fines imposed on drivers of ICE vehicles who park in spaces for electric vehicles. The fine ranges from 20 to 30 tax-free incomes, i.e. from UAH 340 to 510. Parking inspectors have the right to call a tow truck and send violators to the impound lot. The bill came into force in 2020 and is still in force.

However, there is no significant effect due to the lack of timely punishment. And places near electric car chargers are often occupied by conventional cars with internal combustion engines.

The end of 2019 was marked by the emergence of "green" number plateswhich will be issued at the Service Centres of the Ministry of Internal Affairs when registering electric vehicles. Plus, for owners of electric vehicles, there are a ten per cent discount on motor third party liability insurance, which is pleasant at the legislative level.

The government has also taken many steps to promote the production of electric vehicles in Ukraine by removing VAT on the import of components for them. The transition of public transport to electric traction is also accelerating under the Kyoto Protocol signed in 2004, which sets quotas for reducing emissions of harmful substances into the atmosphere. As part of this programme, 17-20 modern electric buses and charging stations will be purchased in 2021 to be installed in fleets.

Current methods of market stimulation:

• removal of customs excise duty on imports;
• 10% discount on CTP insurance for electric vehicles;
• 5% of parking spaces in car parks must be equipped with charging facilities for electric vehicles;
• penalties for those wishing to park ICE cars in places for charging electric cars;
• the emergence of "green" number plates;
• signing the Kyoto Protocol on the transition of public transport to electric traction;
• removal of VAT on the import of components for electric vehicle manufacturers and infrastructure for them.

Initiatives and plans

Despite the active development of electric transport and infrastructure in Ukraine, the authorities are in no hurry to introduce more effective privileges. There were several positive bills that were not supported.

For example, in 2019, it was proposed to allow electric vehicle drivers to park for free, drive in public transport lanes and even increase the speed limit on highways. But this initiative was rejected by the deputies.

Proposals (No. 8159 and No. 8160) to refund 18% of the cost of an electric vehicle when purchased by a citizen of Ukraine were not supported either.

The same projects also provided for a ten-year exemption from income tax for manufacturers of electric vehicles and their components.

It was also planned to install charging stations for electric cars on a mandatory basis during the reconstruction of petrol stations or the construction of new ones. The project has been under development for two years now.

The draft law No. 2054, which provided for the abolition of the Pension Fund fee for the initial purchase of an electric car, was also rejected. Today, it still amounts to 3-5% of its cost.

The same document proposed to simplify the mechanism for allocating land for charging stations for electric cars, as well as not to licence electricity sales services if they are intended for charging cars with an electric power plant. However, it did not find support among MPs and was rejected as affecting the interests of the state budget.

Rejected proposals:

• free parking;
• free movement on public transport lanes;
• cancellation of VAT upon registration;
• removal of income tax for 10 years for manufacturers;
• simplifying the scheme for connecting and registering charging stations.

Plans for full electrification

Meanwhile, in the EU, the transition to environmentally friendly transport is moving even faster and is gaining more support from governments. For example, in Norway, owners of electric vehicles are exempt from any fees and taxes, do not pay for parking and toll roads, have a discount on insurance and loans, and the connection to the power grid for the installation of the charging station is tax-free and has a simplified connection.

In each of the European countries, as well as in the USA and China, there are compensation for the purchase of electric vehicles from 3 to 9 thousand dollars. For the most part of toll roads in Europe are free to useand the promotion of infrastructure is supported at the state level.

All of this is aimed at accelerating the transition to electric transport, thereby reducing environmental damage. In 2020, major cities closed the entrance to diesel cars, and some closed it to all cars with internal combustion engines (Zermatt, Switzerland).

By 2030, such restrictions will cover most of the EU countries, and by 2040, electric vehicles will account for two-thirds of the global market. Trends suggest that Europe will abandon the use of petrol and diesel cars, switching to alternative power sources as much as possible, and this will also affect industry.

Existing EU benefits:

• compensation of the cost in the amount of 3 to 9 thousand USD, depending on the country;
• a ban on the entry of diesel cars into the city, and in some cases petrol cars;
• free parking;
• free travel on toll roads;
• driving on dedicated route lanes;
• simplifying the installation of charging stations.

In this regard, several draft laws have already been prepared in Ukraine and are currently under development, which relate to a ban on the import and registration of cars with internal combustion engines.

For example, one of them provides for the formation of a state policy to stimulate the development of electric transport. However, the project does not provide for any aspects of infrastructure development, simplification of charging stations and modernisation of power grids.

Another document proposes to ban the import and first registration of diesel cars from 2027, and from 2030 - all cars with internal combustion engines and to switch vehicles on the country's roads to electricity.