The Ministry of Finance intends to cancel tax incentives for electric vehicles

The cost of these benefits to the state is estimated at approximately 2.5 billion shekels. The feasibility of continuing to provide the tax benefit is being examined against the backdrop of recent changes in market structure.

Almost 120 thousand electric, hybrid and plug-in hybrid vehicles were sold in the first half of 2026, accounting for about 67% of the total number of new vehicles sold during this period. This is an increase of about 15 percentage points in green market share compared to the same period in 2025, and the penetration rate is almost double that of all of 2023.

Treasury sources emphasize that in recent years the Israeli market has made a rapid and “natural” transition to low-emission models, largely due to the rapid expansion of the supply of cheap Chinese-made models in relevant segments. In their opinion, this change effectively makes further government support for their acquisition through the green tax benefit unnecessary.