Israel Faces Billions in Losses Over Slow Electric Car Adoption

Israel's Ministry of Energy has warned that the country could face billions of shekels in economic losses if the adoption of electric vehicles (EVs) continues to slow. The ministry's report highlights seven key challenges hindering EV sales, which have been declining for several years. These include difficulties in installing charging stations in apartment buildings, market failures in corporate fleets, concerns about driving range, and uncertainty in the used car market.

The report estimates that a successful transition to electric transport could benefit Israel's economy by approximately 15 billion shekels by 2030. However, without government support and concrete solutions, this potential will not be realized. The ministry recommends simplifying charging station installations in multi-unit dwellings, establishing long-term tax policies, setting sales targets for importers, and incentivizing corporate fleets.

Despite these recommendations, the document offers few practical implementation mechanisms, leaving many issues to other government bodies and market participants. One significant problem is the unregulated and variable cost of charging at public stations, which can be as expensive as filling a gasoline car, especially when factoring in travel time to find cheaper options. The ministry, responsible for gasoline prices, has not regulated public EV charging tariffs.

Further obstacles include the complexity of imposing sales quotas on importers, as opposed to manufacturers, and the potential for loopholes in existing regulations. The report also notes that while EVs are becoming more accessible with family models priced around 140,000 shekels, the final price in Israel is influenced by importers and taxes, with a lack of transparency regarding the cost structure. Additionally, Israel lacks a comprehensive vehicle disposal program offering significant incentives for trading in old cars for EVs, unlike European countries.

The repair of EVs also presents challenges, with a shortage of trained specialists and high battery replacement costs. The ministry acknowledges the issue of declining residual values for EVs but offers few solutions for the secondary market. Furthermore, the prevalence of Chinese-made EVs, which are restricted from certain military bases and corporate facilities, limits their usability for a significant portion of the market.

Despite these hurdles, the Israeli EV market is expected to grow due to falling prices, advancing technology, and expanding model choices. However, the Ministry of Energy's report emphasizes that general recommendations and warnings are insufficient; concrete actions addressing the interests of importers, charging operators, and the state are necessary to accelerate the transition.