Ukraine can profit by rebuilding its own transit fleet – expert
Ukraine faces a strategic choice: direct reconstruction funding mainly toward imported equipment, or use that demand to modernize its own manufacturing base. Electric public transit could become one of the most promising examples of the latter path, Yiğit Tahmisoğlu, an energy and climate policy expert at Berlin Economics, wrote in a column for NV Business on Aug. 17.
Ukraine stands at a crossroads in its reconstruction efforts, with the choice of how to allocate reconstruction funds proving pivotal. Energy and climate policy expert Yiğit Tahmisoğlu from Berlin Economics argues that investing in the revival of Ukraine's domestic manufacturing base could yield significant economic benefits. One potential avenue is the development of electric public transit, an area where Ukraine already possesses manufacturing expertise.
The country currently operates a fleet of trams and trolleybuses that are aging, with many surpassing a 20-year lifespan. Moreover, a significant portion of trolleybus infrastructure dates back to the 1960s and 1980s, necessitating modernization. The Ukrainian government's policy mandating electric buses for cities over 250,000 inhabitants by 2028 and a complete transition by 2036 presents a substantial demand for electric vehicles.
Tahmisoğlu examines three scenarios for the market's growth: an inertial scenario requiring up to 100 electric vehicles annually, an optimistic scenario ranging from 100 to 400, and the most ambitious projection of over 400 vehicles per year. Under the most optimistic scenario, annual gross value-added could rise to approximately €387 million ($448 million) over a decade, while the inertial scenario would yield around €45 million ($52 million) per year.
The benefits extend beyond the transit manufacturers, stimulating demand for various industries including electronics, cable products, metal, glass, plastic, software, engineering services, installation, and maintenance. Tahmisoğlu encourages Ukraine to view itself not just as a recipient of international aid but as a potential EU member state and an industrial partner for Europe.
The European market is poised to drive demand for zero-emission urban buses, with European regulations setting targets for electric buses to constitute 90% of the fleet by 2030 and 100% by 2035. Ukrainian manufacturers have the opportunity to integrate into these European supply chains, according to Tahmisoğlu. The ultimate objective is for Ukrainian companies to progressively increase their share of value-added, both domestically and within European production chains.
This strategy could transform the reconstruction of public transit into a new wave of industrialization, emphasizing the importance of sustaining the economic gains within Ukraine's economy.
Written by urgent.news from New Voice of Ukraine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
