Electric vehicle import privileges: how much does the “green” rate cost the budget and who is leading in supply
7 November 22:01
Passenger cars rank second among all product groups in terms of customs duties paid. This is reported by "Komersant Ukrainian" with reference to the State Customs Service of Ukraine.
Between 2022 and October 2025, the volume of VAT-exempt transactions for the import of electric vehicles reached UAH 36 billion. The dynamics indicate an acceleration:
- 2022 – UAH 2.8 billion;
- 2023 – UAH 8.1 billion;
- 2024 – UAH 10.6 billion;
- 10 months of 2025 – UAH 14.5 billion.
The growth is driven by two factors: expanding supply in the global market (especially from Asia) and growing consumer interest in EVs amid high fuel costs and the development of charging infrastructure.
As a reminder, starting from January 1, 2022, Ukraine has a preferential taxation procedure for the import and supply of electric vehicles, introduced by Laws No. 1660-IX and No. 1661-IX. Until January 1, 2026, EV imports are exempt from VAT, and the current regulation does not set any limits on the price of the car or the quantity that can be imported by one importer or individual. This means that both mass models and premium cars are equally benefited.
Geography and brands: who is playing the game
In 2025, China became the main source of supply with imports of UAH 25 billion. This is followed by the US (UAH 14.8 billion) and Germany (UAH 11.7 billion).
In the brand structure, demand is concentrated on BYD, Volkswagen, and Zeekr. The average customs value of one imported electric vehicle is around $21,000, which indicates a wide presence of the middle segment, but does not exclude flagships: in particular, three Rolls-Royce Spectre with a total value of UAH 56.4 million, for which benefits of UAH 11.2 million were granted.
Fiscal balance: where the line is drawn
VAT remains one of the key sources of state budget revenues. It is used to finance the security and defense sector, social expenditures, healthcare and education. The preferential regime, while stimulating “green” mobility, also reduces the tax base. The accumulated “check” of UAH 36 billion in less than four years is a significant price for stimulating demand, especially in the context of a military shortage of resources.
Economic effects: benefits and side effects
The positive effects are obvious: accelerated fleet renewal, reduced emissions in cities, and a boost for charging infrastructure services, local engineering and logistics services. The benefits partially compensate for the high capital costs of entering the technology for households and small businesses.
There are also side effects.
First, lost VAT revenues directly reduce the budget’s capacity.
Second, the absence of price ceilings creates a situation where benefits equally subsidize both affordable EVs and ultra-expensive cars, which raises questions about targeting support from the perspective of social justice and cost-effectiveness.
Thirdly, the import structure (mainly from China) increases trade dependence and does not create enough added value domestically unless localization requirements and programs are launched.
Read also: Car market in 2025: which brands pulled sales up and which car became a bestseller
What the government can do: policy options
Before the end of the grace period in January 2026, the government and parliament should evaluate several configurations:
Targeting: preserving the benefits for the mass segment up to a certain customs value of a car and gradually limiting/canceling them for the premium class.
Social and environmental focus: prioritizing benefits for electric vehicles operating in the commercial segment of cities (taxis, deliveries, car sharing), where the environmental and noise effects are maximized.
Localization focus: partial tax refunds with parallel grants/loans to businesses that develop component manufacturing, charging station assembly, and service facilities in Ukraine.
Infrastructure emphasis: shifting the focus of support from car imports to the development of fast and reliable charging networks, energy storage systems, and smart grids, which reduces the overall barriers for all EV users.
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Prospects for the market and consumers
Demand for EVs is likely to remain elevated until the end of the grace period, given the expectation of a possible revision of the rules in 2026. For households and businesses, TCO metrics remain key: the cost of ownership, availability of service and charging network, and residual value. For the government, it is a balance between climate goals and fiscal sustainability.
Thus, the current incentive regime has fulfilled its incentive role: the electric vehicle market has grown significantly, a stable supply channel from China has been formed, and the middle segment has become more active. At the same time, the fiscal cost of UAH 36 billion and the uneven distribution of beneficiaries put the issue of re-targeting support in 2026 on the agenda.
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