There were more diesel cars, but the "boom" of electric cars did not happen: market analysis by fuel type

Since the beginning of the year, events have taken place and are taking place in Ukraine, which significantly affected all spheres of life, including the automobile market. Experts of the Institute of Car Market Research analyzed the statistics registrations of vehicles in Ukraine and determined how the picture of the Ukrainian market changed during the first half of 2022 from the point of view of fuel.

General dynamics of sales of used cars by fuel type

During the first six months of the year, Ukrainians experienced:

• consequences of the COVID-19 pandemic;
• the beginning of a full-scale war with Russia;
• shortage of fuel at gas stations;
• price increase at gas stations;
• the beginning of zero customs clearance;
• cancellation of zero customs clearance;
• exchange rate changes.

The market "fell" after the well-known events of February 24, and gradually recovered from April. The indicators of June in terms of total volumes are higher than they were even at the beginning of the year. However, this is caused precisely by the effect of "zero customs clearance", which became a catalyst for the recovery of activity.

However, each of the above-mentioned events led to changes in both the number and structure of passenger car sales by engine type. They apply both to the import of used cars with mileage and to domestic resales. Letʼs consider each of the segments in more detail.

Internal resales

Gasoline cars dominate the domestic market — Ukrainians bought 43.9% (124.2 thousand) of such cars in the first half of the year. If you add to them cars with a gas engine ( 22.4% during the first 6 months of 2022 or 63.4 thousand transactions ), the percentage of gasoline cars will actually be even higher: 66.3% of the total number.

More than 30% of cars sold on the domestic market in January-June were diesel (86.4 thousand deals). At the same time, the share of cars with this type of engine increased slightly: from 28.8% in January to 35.5% in June.

The share of other, more ecological types of cars is still insignificant. Thus, among all cars on the domestic market, only 1.5% were electric (4.2 thousand), 1.2% — hybrid (3.3 thousand deals) and 0.5% — exclusively gas (1.3 thousand. agreements).

It is significant that the largest share of electric cars was recorded in May, at the peak of the fuel shortage: 3.5% of the total number of transactions.

Import of cars

In total, in the first 6 months of 2022, 156.4 thousand diesel cars ( 57.1% of the total number), 97.2 thousand gasoline cars ( 35.5% ), 11.9 thousand HBO cars ( 4.3% ) were brought to Ukraine ), 3.4 thousand hybrids (1.2%), 3.3 thousand electric cars (1.2%) and 1.8 thousand gas cars (0.6%).

The period from the beginning of April to the end of June is particularly interesting for research, because it is the time of the so-called "zero customs clearance". Under any other circumstances, it would be impossible to know the picture of actual demand with such accuracy.

Before zero customs clearance began, as now, after its abolition, the formula for calculating the excise tax took into account the type of engine and its volume, and the base rate for diesel cars is 50% higher than for gasoline cars. And although this approach contradicts the law of the European Union, it affected the structure of imports from the point of view of fuel.

The most noticeable change: a significant increase in the number of imported diesel cars. So, in January, the share of imported diesel cars was 38.8%, and in June — already 66%.

This is currently not a very promising type of fuel for passenger cars in Ukraine, because diesel fuel is primarily needed by the Armed Forces, farmers, cargo carriers (now in much larger quantities due to the blocking of our seaports), communal and passenger transport. The price per liter of diesel fuel is higher than for the same volume of gasoline, and the maintenance of a diesel engine, especially when it comes to cars over 10-15 years old, is much higher than that of a gasoline engine. So here it looks like many motorists made hasty decisions without assessing the situation comprehensively.

As for other types of fuel, there is a noticeable quantitative increase in the import of cars with HBO. 3.6 thousand of them were brought in June, and 1.9 thousand in January. Although the share of such machines in the import structure did not increase, but on the contrary decreased. Considering the fact that the propane-butane mixture could be found even during the greatest shortage of fuel, and it costs less than gasoline, they could "drive" cars with HBO even more. However, the share of such offers on European markets is on average about 0.9% (in Poland, up to 3.8%) — so in practice, they simply cannot be found anywhere else.

Much less "gas" passenger cars arrived from South Korea, which only have an LPI -type power supply system — liquefied gas. So, in June, only 163 of them were registered (a share of 0.2% ), while in January — 489 (1.5%). This is a consequence of logistics problems due to the temporary shutdown of seaports in Ukraine.

There was also no "boom" in the purchase of electric cars abroad. Although it can be argued that in June electric cars were imported by 68% more than in January — and that sounds good. But in quantitative terms, it is only 859 "electric cars" against 512.

Why did this happen? The first reason is that there were no changes in taxation for this type of passenger car. "Zero customs clearance" has been operating for them for several years and will continue to operate. In addition, there are 5 more important reasons that prevent the development of the electric car market in Ukraine.

The share/number of hybrids did not increase significantly either — mostly these relatively inexpensive options came to us from insurance auctions in the USA, but the complexity and cost of delivery also had a negative impact on volumes.

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