Israel Moves to Severely Limit Small-Batch Vehicle Imports

Israel's Ministry of Transportation is advancing a significant policy change that would drastically reduce the number of vehicles that can be imported under the "small series" import track, limiting it to just ten units per model annually starting in 2027. This move is expected to impact the marketability of certain Chinese electric car models in Israel and could jeopardize the economic viability of dealerships for brands that have not yet completed full European type-approval.

The "small series" import track was originally intended for manufacturers producing very small quantities of vehicles, but in Israel, it evolved into a pathway for introducing models that had not yet met all European standards. While Europe uses this track for niche manufacturers like McLaren, Israel expanded its quota in 2019 to 400 cars per model annually, aiming to boost competition and accelerate the entry of electric vehicles, even those without full European certification. This import method gained traction in 2023.

The Ministry of Transportation has attempted to alter or cancel this procedure multiple times since then, facing pressure from importers. The proposed new limit of ten cars per year could fundamentally alter the business model for brands that relied on this track to enter the Israeli market. In response to an inquiry from "Calcalist," the Ministry stated that the matter is currently under review by its vehicle division in consultation with legal authorities.

Vehicles imported via the small series track may differ in technical specifications and sometimes lack certain original safety systems compared to fully certified European models. Examples of cars sold in Israel through this route include the Avatr 11, JAC EX30, Aion Hyper HT, Forthing Friday, and Baic EU5. Some models have seen limited sales, with excess inventory being sold as "zero kilometer" vehicles.

While brands like Aion, which are progressing to full European certification, may be less affected, smaller brands without full certification and limited export plans could struggle to remain viable in Israel with such a low import quota. This change comes as Chinese automakers have already secured a substantial market share in Israel, diminishing the need for regulatory leniency that previously encouraged their entry.

The Ministry views this as a step to curb the import of vehicles not meeting all European standards. However, it raises concerns for consumers who have already purchased these cars, potentially facing decreased resale value, difficulties in future sales, and uncertainty regarding parts and service availability. While the restriction might encourage a shift to fully certified models and potentially reduce the supply of cheaper electric cars, it could also limit the availability of affordable electric vehicles sold through promotions.