Israel Electric Vehicle Market Report, Size, Share, Opportunities, and Trends Segmented By Vehicle Type, Propulsion Type, Drive Type, Component, and End User – Forecasts from 2025 to 2030

Description

Israel Electric Vehicle Market Size:

The Israel Electric Vehicle Market is expected to witness robust growth over the forecast period.

Israel Electric Vehicle Market Key Highlights

• The Battery Electric Vehicle (BEV) market share of new passenger car registrations reached approximately 23.9% in 2024, demonstrating rapid consumer adoption despite rising taxes.
• Government policy shifts have reduced the tax benefit ceiling on EVs, compelling importers to advance shipments; one-third of the annual 2024 vehicle imports arrived in December 2023.
• Chinese Original Equipment Manufacturers (OEMs) have emerged as the leading market force, with one major Chinese brand securing a commanding 30.1% market share in the country's EV segment in 2024.
• A government-backed program, supported by the Ministry of Energy, is financially supporting the installation of high-speed charging stations to alleviate infrastructure-related range anxiety, a critical factor for sustained demand.

The Israeli Electric Vehicle (EV) market is undergoing a structural transformation, catalyzed by a confluence of ambitious government decarbonization targets and an influx of international competition. Despite legislative actions designed to moderate fiscal incentives, including a planned phased increase of the purchase tax on EVs, consumer demand remains resilient. This dynamic creates a tension between the state’s need to replace declining fossil fuel tax revenues and its goal of achieving a significant reduction in new private vehicle emissions by 2030. The market's accelerated growth trajectory is now largely dependent on overcoming charging infrastructure gaps and managing the pricing pressures stemming from reduced subsidies.

Israel Electric Vehicle Market Analysis

• Growth Drivers

High domestic gasoline prices, coupled with a public preference for advanced technology, act as a primary catalyst for EV demand. Israel’s relatively low electricity prices further enhance the total cost of ownership (TCO) proposition for electric vehicles compared to traditional Internal Combustion Engine (ICE) vehicles. Additionally, the government's declaration to cease the import of fossil fuel-powered private vehicles by 2030, though not yet fully translated into binding regulation, creates a long-term behavioural mandate that drives current purchasing decisions towards electrification. This policy signal directly increases future demand by establishing EVs as the only viable path for private transportation.

• Challenges and Opportunities

The primary challenge constraining demand is the rising cost to the consumer due to the phased increase in the EV purchase tax, which climbed from 20% in 2023 to 35% in 2024, with a further planned increase to 45% in 2025. This fiscal headwind compresses profit margins for importers and necessitates price increases, potentially slowing the rate of mass-market adoption. An opportunity lies in the deployment of charging infrastructure. Government tenders supporting the installation of ultra-fast and high-speed public charging points are addressing the critical public segment's range anxiety, which, when mitigated, directly increases the addressable market for private vehicle demand, particularly for apartment dwellers without dedicated home charging access.

• Raw Material and Pricing Analysis

The Electric Vehicle is a physical product, making raw materials and pricing dynamics critical to its market penetration. The vehicle's price is highly sensitive to the global cost and supply chain efficiency of battery cells and packs, specifically key materials like lithium, nickel, and cobalt. The cost-competitiveness of imported EVs is directly impacted by the reduction in battery costs globally. However, this downward trend is offset in the Israeli market by the reduction in tax benefits and currency fluctuations, which together introduce a domestic price floor and complicate the TCO advantage. Strategic vehicle importers sought to mitigate the impact of the rising purchase tax by significantly advancing imports, a tactic that temporarily maintains price competitiveness but strains logistical and inventory management capabilities.

• Supply Chain Analysis

Israel is solely reliant on the import of completely built units (CBUs) for its EV fleet, making its supply chain highly dependent on global production hubs, notably China, which supplies a significant share of the popular models. The logistics chain is complex, involving long-distance maritime transport to the ports of Eilat and Ashdod. This dependence creates vulnerability to geopolitical and global shipping disruptions, such as the Red Sea attacks reported at the close of 2023, which strain the timely delivery and inventory build-up necessary to support sustained demand. Importers must strategically manage large inventories, as seen with the rush of imports ahead of the 2024 tax changes.

Government Regulations

In-Depth Segment Analysis

• By Propulsion Type: Battery Electric Vehicle (BEV)

The Battery Electric Vehicle segment serves as the central force in the Israeli market's transition, achieving a new registration market share of nearly 24% in 2024. The fundamental growth driver for BEVs is the combination of lower operating costs and a superior TCO compared to HEVs and PHEVs, particularly for high-mileage users who benefit most from low electricity tariffs. The full environmental benefit associated with zero tailpipe emissions strongly resonates with the environmentally conscious consumer base in Israel. Furthermore, as battery energy density and driving range continue to advance, the diminishing concern over 'range anxiety' in a geographically small country with established fast-charging corridors further solidifies the BEV's demand trajectory over alternative propulsion types. The strong performance of BEVs, despite rising purchase tax, indicates that the cost-benefit analysis for the consumer still heavily favours the pure electric model.

• By End User: Private

The private consumer segment is the definitive primary growth factor, absorbing the vast majority of new EV registrations. Another driver for private adoption is the combination of substantial financial incentives and increasing product availability. Historically, the significant reduction in purchase tax relative to ICE vehicles made the initial acquisition cost manageable. Although the tax advantage is diminishing, the rapid influx of competitively priced models, especially from Asian OEMs, maintains high purchasing accessibility across different socioeconomic brackets. This segment's growth is also intensely impacted by second-order factors, such as the increasing availability of EV-specific leasing and insurance products, which mitigate residual value risk and simplify the ownership proposition for the individual buyer. The ability of the private user to access home or workplace charging further strengthens demand by reducing reliance on the still-developing public charging network.

Competitive Environment and Analysis

The competitive landscape is defined by the rapid emergence of Asian brands challenging the dominance of established global OEMs. The Israeli market serves as a proving ground for several Chinese manufacturers who leverage price competitiveness and swift model introductions to capture significant market share.

• BYD

BYD is positioned as a market leader, capturing the largest segment of the burgeoning EV sales. The company's strategic advantage stems from its vertical integration, including proprietary Blade Battery technology, which addresses consumer concerns over safety and vehicle performance. The partnership with local distributor Shlomo Motors, established in August 2022, provided an immediate, expansive distribution and after-sales network, which is critical for bolstering buyer confidence and scaling sales volumes rapidly across the country.

• Tesla

Tesla maintains a significant presence by utilizing its direct-to-consumer sales model, bypassing traditional dealership networks. Its strategic positioning focuses on technology leadership, brand equity, and the proprietary Supercharger network, which provides a key value-add for its owners. The company's models, such as the Model Y and Model 3, are volume drivers, though their prices are highly sensitive to tax changes, as demonstrated by their price adjustments following the purchase tax increases.

Recent Market Developments

• September 2025: The Kia EV3 electric crossover was launched in Israel with a starting price of around NIS 165,000 and a maximum range of up to 589 km. It was introduced with two battery options and three trim levels, aiming to compete directly with the dominant Chinese electric models. The launch was viewed as an effort to stimulate EV purchases by fleets and agencies that may be hesitant to source vehicles from Chinese manufacturers, representing a significant move by a traditional global automaker to revive market share.
• July 2025: Chinese automaker Geely expanded its premium electric Zeekr brand lineup in Israel with the official launch of the Zeekr 7X electric mid-size crossover SUV. This model is the third Zeekr to be offered, following the 001 and X, featuring a driving range of up to 610 km and a maximum speed of 210 km/h. Its fast-charging capability allows for a 10-80 percent charge in 13-16 minutes, solidifying Geely's aggressive push into the high-end electric SUV segment in the Israeli market.
• Early 2025: The Xpeng G6, a mid-size electric crossover SUV from China's Xpeng Motor, rapidly became a top-selling electric car in Israel following its launch and increasing deliveries in late 2024/early 2025. It surpassed established competitors to lead electric car sales in the first half of 2025, demonstrating strong consumer acceptance for its design, technology, and competitive pricing in the crossover segment. Its success highlighted the continuing strength of new Chinese brands in Israel's EV landscape.

Israel Electric Vehicle Market Segmentation

BY VEHICLE TYPE

• Passenger Vehicle
• Commercial Vehicle
• Others

BY PROPULSION TYPE

• Battery Electric Vehicle (BEV)
• Hybrid Electric Vehicle (HEV)
• Plug-in Hybrid Electric Vehicle (PHEV)
• Fuel Cell Electric Vehicle (FCEV)

BY DRIVE TYPE

• Front Wheel Drive
• Rear Wheel Drive
• All Wheel Drive

BY COMPONENT

• Battery Cells & Packs
• Onboard Chargers & Motor
• Brake, Wheel & Suspension
• Others

BY END USER

• Public
• Private
• Commercial

Table Of Contents

1. EXECUTIVE SUMMARY 

2. MARKET SNAPSHOT

2.1. Market Overview

2.2. Market Definition

2.3. Scope of the Study

2.4. Market Segmentation

3. BUSINESS LANDSCAPE 

3.1. Market Drivers

3.2. Market Restraints

3.3. Market Opportunities 

3.4. Porter’s Five Forces Analysis

3.5. Industry Value Chain Analysis

3.6. Policies and Regulations 

3.7. Strategic Recommendations 

4. TECHNOLOGICAL OUTLOOK 

5. ISRAEL ELECTRIC VEHICLE MARKET BY VEHICLE TYPE  

5.1. Introduction

5.2. Passenger Vehicle

5.3. Commercial Vehicle

5.4. Others

6. ISRAEL ELECTRIC VEHICLE MARKET BY PROPULSION TYPE  

6.1. Introduction

6.2. Battery Electric Vehicle (BEV)

6.3. Hybrid Electric Vehicle (HEV)

6.4. Plug-in Hybrid Electric Vehicle (PHEV)

6.5. Fuel Cell Electric Vehicle (FCEV)

7. ISRAEL ELECTRIC VEHICLE MARKET BY DRIVE TYPE  

7.1. Introduction

7.2. Front Wheel Drive

7.3. Rear Wheel Drive

7.4. All Wheel Drive

8. ISRAEL ELECTRIC VEHICLE MARKET BY COMPONENT

8.1. Introduction

8.2. Battery Cells & Packs

8.3. Onboard Chargers & Motor

8.4. Brake, Wheel & Suspension

8.5. Others

9. ISRAEL ELECTRIC VEHICLE MARKET BY END USER  

9.1. Introduction

9.2. Public

9.3. Private

9.4. Commercial

10. COMPETITIVE ENVIRONMENT AND ANALYSIS

10.1. Major Players and Strategy Analysis

10.2. Market Share Analysis

10.3. Mergers, Acquisitions, Agreements, and Collaborations

10.4. Competitive Dashboard

11. COMPANY PROFILES

11.1. Toyota Motor Corporation 

11.2. XPeng Inc.

11.3. Chery Holding Group 

11.4. Tesla 

11.5. Hyundai Motor Group

11.6. BMW 

11.7. GAC 

12. APPENDIX

12.1. Currency 

12.2. Assumptions

12.3. Base and Forecast Years Timeline

12.4. Key benefits for the stakeholders

12.5. Research Methodology 

12.6. Abbreviations 

Companies Profiled

Toyota Motor Corporation 

XPeng Inc.

Chery Holding Group 

Tesla 

Hyundai Motor Group

BMW 

GAC 

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