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The average age of trucks in Ukraine is 18 years. How to change it?


The general situation on the truck market

From January to July 2023, Ukrainians purchased 48,500 trucks (excluding tractor-trailers). Most of them were purchased on the domestic market: 37.9 thousand, which is 78.1% of the total number. Another 6.9 thousand were brought used from abroad (14.2% of the total number). In general, the absolute majority of trucks are bought used today: they were 92.3% in total. The remaining 7.7% (3.7 thousand) were purchased new: 2.5 thousand were imported new from abroad (5.2%), another 1.2 thousand (2.5%) were converted in Ukraine.

Dynamics of the truck market in August 2022 — August 2023

The average age of trucks that were resold on the domestic market during the first 7 months of 2023 was 17.9 years. If we take a closer look at the most popular models of trucks during this period, it is noteworthy that all models on the list have an average age of more than 10 years, two of which are more than 30 years old.

The most popular trucks on the domestic market in January-August 2023

The situation in the segment of imported used trucks is better: the average age in January-August 2023 was recorded at the level of 6.2 years. The list of the most popular models is dominated by Renault Master, Mercedes-Benz Sprinter and Volkswagen Crafter.

The most popular imported trucks in January-August 2023

However, the number of imported trucks is too small to qualitatively update the market. The import of used trucks is subject to the Euro-5 environmental standard (Euro-2 for passenger cars), and 40 times higher excise tax is charged on vehicles older than 5 years. This was done ostensibly to stimulate the import of newer cars, but in practice this decision only slows down the renewal of the truck fleet. Since Ukrainians lack funds for new cars, there are no available financing programs, and there is a deficit in the domestic market, therefore the fleet is mainly replenished with used trucks from abroad.

At the same time, due to legal restrictions, the actual technical condition, the presence of catalytic converters, soot filters and other mandatory elements are not taken into account during import, but only the nominal technical characteristics and the year of manufacture. In this way, the function of stimulating the use of ecological transport is not fulfilled: outdated commercial equipment will continue to move on the roads, and small and medium-sized businesses will be deprived of the tools to update the fleet.

Electric trucks are the way out?

The majority of trucks brought from abroad new or used in January-August 2023 were diesel : 95.7%. Another 1.7% were gasoline, and 0.4% — with a factory gas installation. The remaining 2.2% were electric (239 units). The peak of imports was the period from July to August last year: then, on average, 70 such cars were brought from abroad every month. The share of electric trucks in August 2022 reached a historical maximum: 5.4% of the total number of imported trucks. At that time, there were two determining factors that stimulated the purchase: the effect of the so-called zero customs clearance, and the shortage and increase in the price of fuel in Ukraine. In August 2023, the share of electric trucks in imports was 2.2% (37 units).

Structure of import of new and used trucks by fuel type, January-2022 — August-2023

In total, from January to August 2023, Ukrainians brought almost 20,000 electric cars from abroad. Almost all of them were cars, and only 1.2% (239 units) were trucks. In total, the fleet of electric trucks in Ukraine, according to the estimates of the Institute of Car Market Research, as of the end of August 2023, was 2,070, while there were more than 65,000 electric passenger cars.

Why do Ukrainians not import electric trucks, but actively import passenger cars with an electric engine, setting new records every month? If we set aside the low purchasing power, the lack of financing programs and the peculiarities of the operation of electric cars in Ukraine, the main reason is import taxation.

Zero customs clearance on electric cars, but not all

As of today, passenger cars with an electric engine are exempt from customs duty, VAT and pension fund levy. Only a small excise duty of 1 euro per 1 kW of battery capacity must be paid. This encourages Ukrainians to buy cars with an electric engine: savings can be more than 40% compared to the cost of customs clearance of a car with an internal combustion engine. However, when importing an electric truck, you need to pay additional VAT in the amount of 20% of the value, although this was not always the case.

Until recently, the Tax Code provided benefits for all types of electric vehicles, including trucks. There is a list of UCT ZED codes cars to which VAT exemptions apply: in particular, 870490000. Electric trucks were classified according to this code until recently. However, in the fall of 2022, changes took place: the Law on the Customs Tariff was passed, and more than 1,000 codes were changed for unification in accordance with the international standards of the World Trade Organization. Among them, the code for electric trucks: 870490000 was changed to 870460000.

The problem is that the Tax Code exempts the old UKT ZED code from paying VAT, and since the beginning of the year, the customs office has been classifying electric trucks according to the new one — already without the benefit. This is explained by the fact that this is the only product with a changed code for which preference was provided. Therefore, the transitional tables from the old codes to the new ones used by the customs are not sufficient for tax exemption.

What can be done?

The logic of the legislators from the very beginning was as follows: the import of all vehicles with an electric motor is exempt from paying most customs duties. The fact that the customs office today charges VAT on the import of electric trucks is a consequence of the inconsistency of legislation, the so-called legal conflict, says Stanislav Buchatskyi, CEO of the Auto Market Research Institute. In order to restore the status quo and put buyers of both cars and trucks on a level playing field, a simple change to the legislation should be made, the expert says: replace the outdated codes 870490000 and 870460000 in the Customs Code.

This, first of all, will restore fairness and create a level playing field for importers of electric vehicles of all types. Secondly, it will contribute to the renewal of the car fleet with ecological modes of transport — at the same time, in the segment of transport that moves the most — commercial. Thirdly, it will save money for small and medium-sized businesses, which will have the opportunity to buy a car for work cheaper, and therefore — an impetus for development.

What do the lawmakers say about it?

Peopleʼs deputy Yaroslav Zheleznyak, deputy chairman of the Committee on Finance, Tax and Customs Policy, in a comment to the Institute of Car Market Research, noted that against the background of other problems in the warring country, this issue simply did not make it to the list of priorities. " Of course, the adoption of the budget for the next year or benefits for military equipment and the technical amendment on the preferential import of electric cars are not comparable. However, justice must be restored and the logic laid down from the very beginning must be returned to the legislation. My colleagues and I will make the appropriate correction. I hope the Rada will support it, " said the Peopleʼs Deputy.

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