In recent years, electric vehicles have become very popular around the world, as they help in reducing air pollution since they emit fewer greenhouse gasses and air pollutants than petrol or diesel cars. EV also help to reduce the amount of energy spent on transportation than conventional vehicles since EVs consume 3-4 times less than a typical oil powered vehicle.
These benefits are very crucial to Ukraine because the Ministry of Infrastructure of Ukraine reported that 33% of greenhouse gasses (GHG) from transport Emissions in Ukraine also about 25% of global primary energy consumption goes to the transport sector(Alexander Ozeran 2022).
To promote the use EV that will help solve the issues above, the Ukrainian Parliament in July 2021 submitted amendments that provide tax and custom exemption for imports and purchase of electric vehicles. The tax incentives amendments include:
– The exemption on import Value Added Tax(VAT) and customs duty for between 1 January 2022 and 31 December 2030 for all equipments and spare parts for manufacturing of EVs, electro buses and electric cargo vehicles, as well as vehicles using natural gas or biogas;
– The exemption from Value Added Tax(VAT) on sale of EVs, electric cargo vehicles, vehicles powered by natural gas or biogas in the National Ukrainian Market until 31 December 2025
– The exemption of Income taxes for companies that exclusively manufacture electric engines, batteries, charging equipment and EVs but also transport that uses natural gas until 31 December, 2035.
Electric Vehicle Draft law
This draft law provides a policy framework of Electric Vehicles in Ukraine. It explains that the development and infractures of Electric Vehicles must be a priority in state policies in the automobile transport sector. This law also promotes the use of EV in Ukraine than the oil powered buses to move in the cities to reduce emission. The draft law further emphasizes on the implementation of the EV buses that:
– Firstly, It is required that after 1 January 2030, the exclusive use of electric buses on bus routes of general usage in the regime of regular passenger transportation. The EV Draft Law specifies that battery capacity of such electric buses must cover daily mileage without additional recharging.
– Secondly, the tenders for rendering passenger transportation services must require fleets of electric buses of at least 20% after 1 January 2025, 40% after 1 January 2027 or 80% after 1 January 2029 must be established. Thirdly, tender winners with fleets made up of at least 50% electric buses may execute these agreements up to seven years; and for fleets of more than 50% electric buses, this can be extended up to ten years other than the be executed from three to five years.
– Lastly, transport companies in Ukraine that use electric buses must have fleets of which 85% are Ukrainian-made electric buses (Notice on the publication of the draft Law of Ukraine, 2022). Tax changes and draft laws await the approval of the Cabinet of Ministers of Ukraine before voting in the parliament.