Israel's Electric Vehicle Transition Faces Setback Amid Falling Sales

Israel's national program to transition to environmentally friendly transport is at risk of failure due to a sharp decline in electric vehicle sales and a lack of clear incentives for consumers, according to a new report from the Ministry of Energy. The ministry's strategic analysis and demand model reveal alarming trends: after electric vehicles accounted for 25% of new car sales in 2024, this figure dropped to 20% in 2025 and further declined to a mere 12% in the first half of 2026.

The government's ambitious target is for 90% of new cars sold by 2030 to be electric. However, the Ministry of Energy projects that under current economic policies, this goal will not exceed 40%. This shortfall is expected to halve the economic benefit to the country, reducing it from 20 billion shekels to less than 10 billion shekels, while citizens will continue to pay more for fuel and endure air pollution.

Experts attribute the primary cause of this failure to the Ministry of Finance's actions. Sudden tax changes and the continuous reduction of benefits have created significant uncertainty, deterring consumers from purchasing electric cars. The Ministry of Energy also acknowledges its own shortcomings, including delays in streamlining bureaucracy for home charging station installations and inefficiencies in infrastructure funding.