Electric Vehicle Sales Plummet in Israel, Costing Billions

The penetration rate of new electric vehicles (EVs) in Israel has significantly declined, dropping from 25% in early 2024 to an estimated 20% in 2025 and a mere 11% by early 2026. This sharp decrease, detailed in a new policy document from the Ministry of Energy and Infrastructure, contrasts with global trends.

According to the ministry's calculations, each EV replacing a gasoline car saves the economy approximately NIS 24,700 annually in environmental pollution, energy, and maintenance costs. For private consumers, the savings over the vehicle's lifespan are estimated at NIS 70,000.

The projected slowdown in EV adoption is expected to cost the Israeli economy about NIS 1.4 billion in 2026 alone, compared to original targets. By 2030, this deficit could exceed NIS 5 billion.

The primary obstacle identified is the difficulty in installing charging stations in shared residential buildings, where about 80% of Israeli households reside. Another significant factor is that a substantial portion of new EVs are purchased by leasing companies and corporations, which may not fully prioritize the long-term savings associated with electric vehicles.

The document recommends government incentives, including long-term tax breaks tied to meeting targets, deferring tax increases on EVs, offering direct assistance to building committees for charging infrastructure, and targeted solutions to encourage leasing companies and fleets to purchase EVs. The ministry also suggests exploring a model similar to the UK's, where automakers face penalties for failing to meet EV sales targets.