The Ukrainian Government Has Canceled Tax Benefits for Electric Vehicle Imports: Consequences for the Market

The Cabinet of Ministers of Ukraine has decided to reject the initiative of the Verkhovna Rada to extend tax benefits for the import of electric vehicles, which were set to last until January 2027. The main reason for this step is cited as significant losses to the state budget, as well as the impact of agreements with the International Monetary Fund.

This is reported by AgroReview

Reasons for the Cancellation of Benefits and Financial Consequences

Since 2019, significant tax reliefs have been in place for the import of electric vehicles in Ukraine: the value-added tax (VAT) and customs duties were abolished, and the excise tax was reduced to €1 per kWh. Additionally, from July 2022, no fees were charged to the Pension Fund when purchasing an electric vehicle. However, according to this year’s data, the VAT benefits for electric vehicle imports cost the state budget 14.5 billion hryvnias.

Impact on the Electric Vehicle Market and Future Projections

In September and October 2025, electric vehicles reached a record market share of new passenger cars—around 33%. According to estimates from the National Bank, in 2025, the volume of electric vehicle imports could exceed 2 billion US dollars, significantly more than the 1.3 billion dollars in the previous year.

“After the expiration of the import benefits, the volumes of electric vehicle imports are expected to decrease. In particular, the reduction in imports will be aided by accumulated stocks of vehicles in 2025. The decline in imports will continue until there is a significant reduction in stocks. After that, a gradual recovery of electric vehicle imports is anticipated, which could return to 2024 levels overall by 2026.”

Thus, the electric vehicle market in Ukraine is expected to undergo a correction in the coming years: following the end of tax benefits, imports will temporarily decrease, but may eventually recover to previous levels over time.