The EU has banned the production of new cars with internal combustion engines. How will it affect Ukraine?

From 2035, it is forbidden to produce cars with internal combustion engines on the territory of the European Union. The European Parliament made the relevant decision this week. Experts of the Institute of Car Market Research have studied how the new rules may affect the Ukrainian car market.

The decision was made as part of the "Fit for 55" package, which provides for the reduction of greenhouse gas emissions by the European Union by 55% by 2030. The decision of the European Parliament should reduce the amount of CO2 emissions from new passenger cars and minibuses by 100%. From 2035, it will be possible to manufacture new cars and minibuses exclusively with electric engines, with battery or hydrogen power sources. It will also be impossible to import new cars with internal combustion engines from abroad.

Ian Guitema, the European Parliamentʼs rapporteur, said the new rules would set the course for the car industry and encourage the production of zero- and low-emission cars. This will contribute to achieving climate neutrality by 2050, which is one of the global goals of the European Union. "Buying and traveling in zero-emission cars will become cheaper for consumers, and the market for used electric cars will grow faster. In this way, ecological driving will become available to everyone," the politician said.

How can the new rules affect the Ukrainian car market?

The Institute of Car Market Research is convinced that the new rules in the EU will not have a significant impact on the Ukrainian car market. There are several reasons for this.

• The new rules will apply only to new cars, and mainly concern car manufacturers. It was not forbidden to bring used cars from DVZ to the EU.
• The use of used cars is not subject to these restrictions. The EU secondary market will continue to exist, the replacement of internal combustion engine cars with electric ones will take place gradually, there will be no drastic changes. There will be no collapse in prices for used cars with internal combustion engines.
• Currently, although Ukraine is a candidate for joining the European Union and has a plan to implement the directives, we have our own rules regarding the manufacture and import of cars. This will allow importing new cars from other markets — America, China, Japan, South Korea, China and others, where there are no restrictions on cars with internal combustion engines.
• The basis of the Ukrainian car market, due to economic reasons and low purchasing power, is sales of cars with mileage. Every month, Ukrainians buy only 3.5-4 thousand new cars. A sharp increase in their sales is possible only in case of economic growth and the appearance of affordable financing programs, and to increase the share of electric cars, the development of charging infrastructure.

Thus, the new rules in the EU will not have a pronounced impact on the main part of the Ukrainian car market — the import and sale of used cars. At the same time, the Ukrainian car fleet with internal combustion engines will gradually be replenished with used electric cars from abroad, the prices of which will gradually decrease. New cars manufactured in EU countries that will be imported to Ukraine will be electric only, the model range will gradually change, but cars with internal combustion engines from other countries will also enter the market. No drastic price changes are expected for both new and used cars.