Israel's Vehicle Market Saw Record New Car Registrations in 2025 Despite Import Drop

Israel's vehicle market experienced a surprising surge in new car registrations in 2025, reaching an all-time high of approximately 290,000 passenger vehicles, an 8.4% increase from 2024. This record was set despite a significant 25% drop in vehicle imports, with only about 250,000 cars brought into the country. The number of registered vehicles exceeded the total imports by 21.4%.

The discrepancy is attributed to importers strategically accelerating shipments in December 2024 to pre-empt tax increases that took effect in January 2025. This early import surge, with one-third of the combined 2024-2025 annual import volume arriving in that single month, created substantial inventory. This allowed dealerships to maintain a high pace of deliveries, with over 50,000 new passenger cars registered in January 2025 alone.

Concurrently, the total value of imported vehicles in 2025 fell by 20.9% to 23.6 billion shekels. This decline was driven by the reduced import volume, lower overall import prices, and a significant influx of more affordable electric vehicles. Chinese manufacturers dominated this trend, supplying 96% of imported plug-in hybrid vehicles and 88% of fully electric vehicles.

This shift towards alternative powertrains occurred even as government tax incentives were reduced. The purchase tax on electric vehicles reached 45% in 2025, following the elimination of tax breaks for regular and plug-in hybrid vehicles in previous years. Despite these tax measures, advanced powertrain vehicles, including hybrids and electric cars, constituted about 60% of all new passenger car registrations in 2025. Regular hybrids led with 28.4%, followed by fully electric vehicles at 20%, and plug-in hybrids at 11.9%.