Electric Cars Overtake Gas in Europe Amid Israeli Decline

In the first nine months of 2026, electric vehicles (EVs) surpassed gasoline cars in the European Union, accounting for 22.7% of new registrations compared to gasoline cars' 21.2%. This marks a significant shift from the previous year when EVs held a 16.1% market share. In September alone, EV registrations surged by 72.9% to approximately 290,000, making nearly three out of every ten new cars in the EU electric. Across 17 major European markets, including Norway and Switzerland, EVs captured 32.6% of the market in September. Traditional hybrids remain the leader in Europe with 36.3% market share year-to-date, while gasoline and diesel combined fell to 28.2%. France and Germany are spearheading this EV growth, offering consumer grants through new programs. France saw a 79.1% increase in EV registrations year-to-date, and Germany experienced a 58.1% rise. Several countries, including the Netherlands, Belgium, and Denmark, now have EVs making up over half of their new car markets. Italy lags behind, with EVs holding only a 7.6% share. Norway leads Europe with approximately 98.8% of new car registrations being electric in September, a trend supported by tax exemptions since the early 1990s. Factors driving the European EV surge include high and volatile fuel prices, an expanding range of affordable models, and EU emissions regulations. However, a proposed EU agreement to soften the 2035 ban on new gasoline car sales, aiming for a 90% emissions reduction instead of a complete ban, could slow future growth.

Conversely, Israel is experiencing an opposite trend. From January to September 2026, electric car deliveries stood at about 32,000, representing only 12.5% of the market, a decrease from 20.4% in the same period last year. Plug-in hybrids have surged, capturing 25% of the market, more than doubling their share from the previous year. Combined, all types of electrified powertrains reached 69.5% of the Israeli market. The primary reason for this shift is a significant increase in purchase tax on electric cars, rising to 48% in 2026 from 45% in 2025, with a reduced tax benefit cap. Chinese manufacturers have flooded the market with plug-in hybrid models at competitive prices. The current tax benefits, originally set to expire, have been automatically extended to February 10, 2027, due to elections. In contrast to Europe's government subsidies for EVs, Israel's government is gradually reducing tax benefits. The Ministry of Transport reports that in September, EVs held a higher share of 19.6% of cars that took to the road, including parallel imports. Public charging infrastructure is developing slowly, with approximately 24 private EVs per public charging station, leading most drivers to charge at home or work. The Ministry of Finance is considering a road usage tax on EVs and plug-in hybrids, which could diminish fuel savings.