Ukraine aims to kick-start the electric car industry

Ukrainian Prime Minister Denys Shmyhal said the country’s vast lithium reserves could kick-start an electric vehicle (EV) industry that could meet domestic demand within five years and lead to exports later.

“Lithium deposits make it possible to create a full cycle of electric car production not only for domestic needs but also for export,” Shmyhal said at a forum dedicated to the two-year anniversary of the special tax regime in Diia City.

According to an official press release, there are plans to introduce EV makers to the Diia City program “in the near future,” alongside other tech innovators such as bionic prosthetics manufacturers.

The Ministry of Digital Transformation told dev.ua, a Ukrainian technology news channel, that many Ukrainian companies already have experience in working with the automotive industry and developing control systems for cars, autonomous control systems and electric motor control systems, among others.

“These are huge prospects for Ukraine – not only to be an exporter of lithium – but to establish full cycle production here and create products with high added value for domestic and foreign markets. For this it is necessary to create favorable conditions. So we want to do it within ‘Diia City’,” the press release said.

Forbes reported last year that Ukraine’s lithium ore reserves account for one percent of global reserves and a third of European reserves.

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“Ukraine’s lithium reserves are enough to supply batteries for almost 20 million electric cars,” said Roman Opimakh, head of State Geodesy, adding that the exact amount of lithium reserves remained confidential.

Challenges in battery production

While Ukraine has the potential to develop its domestic EV industry, the process may be more nuanced than it seems at first glance.

Before moving into the production of electric vehicles, the production of lithium batteries alone presents a number of challenges.

In a column for Interfax published in May 2023, Denys Alyoshin, director of strategic development of UkrLithium Production LLC, said that there are four known lithium deposits in Ukraine, but one is located in occupied parts of the Donetsk region, while another is close is near the border. front in the Zaporizhia region.

Alyoshin said that surveys of all four sites took place under the Soviet regime, but the regime did not conduct any mining activities.

He said a new, modern survey is needed to confirm the deposits – at least in locations under Ukrainian control – and then a mine should be built. New factories would then be needed to convert the ores into industrial products, requiring international investment and expertise.

“In such a high-tech area, there are certain requirements for each stage of production – from ore and concentrate to finished batteries. This requires hundreds of millions of dollars in investments, vast international experience and years of patience, even without wars and quarantine restrictions,” Alyoshin said.

Alyoshin expressed his belief about the prospects of Ukraine’s integration into the global EV market and that this could create a lot of employment, but noted that this “should be the dream or goal of the post-war transformation of the Ukrainian economy .”

Existing EV manufacturers in Ukraine

Apart from batteries, Ukraine currently does not have the ability to produce certain components to maintain full production. Currently, there are a number of EV manufacturers in Ukraine with varying degrees of production maturity.

Oleksandr Lytvyn, CEO of Ukrainian e-bike manufacturer Bayka, told dev.ua that Ukraine has produced electric buses and trolleybuses, but consumer electric cars have only reached the “project” stage.

Serhii Denysenko, COO and co-founder of e-bike maker Delfast Bikes, told dev.ua that there are only three EV companies in the country: COOLON, currently on hold during the war, LUAZ, a rebranded Soviet off-road vehicle factory that went electric, and Electron, an electricity company in Lviv that also produces electric transport vehicles.

Denysenko told dev.ua that his company sourced most of its components from abroad because only the metal and plastic parts could be manufactured in Ukraine.

An article by Ukrainska Pravda, published in January 2023, focused on the development of LUAZ. Originally a Soviet car manufacturer in the Lutsk region that underwent restructuring and bankruptcy, it was revived as an EV maker by current owner Vadim Ignatov.

However, it appears that LUAZ has mainly enlisted the help of Chinese Original Equipment Manufacturers (OEMs), with most components made in China.

Ignatov said the lack of components and production facilities in Ukraine has pushed LUAZ to use foreign components, but the company is exploring the feasibility of using Ukrainian-made components, such as batteries from Ukrainian manufacturer EmGo Technology, based in Odessa.

However, the engine remained Chinese-made due to the lack of options domestically.

“There is a very simple asynchronous motor with a power of 5 kW, but we have not found any manufacturers in Ukraine either,” Ignatov said.

As such, Ukraine’s EV dream remains a daunting task – not impossible, but there is still a long way to go.

However, if successful, the plans will allow Ukraine to take advantage of the EU’s goal of becoming fully electric and fully electric by 2035, and Kiev’s growing ties with the bloc have just the right political and economic circumstances created.

All that remains is that Ukrainian industry will pick up the pace and catch up with the trend, but even if the will is there, there is still a long way to go.

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