A ground drone delivers supplies in the streets of Kostyantynivka in Donetsk.
Kostiantyn Liberov/Libkos/Getty Images
An electric vehicle tax that came into force this year inadvertently cost Ukraine thousands of ground drones it needs on the front lines, the CEO of a major defense trade association said.Had the 20% value-added tax, which went into effect in January, not been introduced, Ukraine's military could likely have bought 5,000 more uncrewed ground vehicles in the first half of 2026, said Ihor Fedirko, the CEO of the Ukrainian Council for Defense Industry."We know that our government is procuring 25,000 in the first half of this year. If they could procure 20% more, that's 5,000," Fedirko told Business Insider. "For our armed forces, that's a lot."The new tax also threw the local ground drone industry and military into disarray at the start of the year, causing contracts to dry up for months and several major manufacturers to nearly go out of business, he added.Ukrainian lawmakers are now racing to undo the tax, with some politicians saying it's handicapped a key war industry that Kyiv is trying to rapidly expand.Nina Yuzhanina, a lawmaker for Ukraine's European Solidarity party, said in a statement last week that the EV tax "almost ceased" the supply of ground drones to the military in some areas.She and 44 other Ukrainian parliamentarians introduced a bill on May 19 aiming to fix the core issue: because uncrewed ground vehicles, or UGVs, are so new, they were lumped together with EVs by the country's trade standards. The new law would define the drones as a separate good, exempting them from the 20% tax.
