Israel brought in far fewer cars in 2025, yet more new cars hit the road than ever before. That’s the puzzle at the center of the Israel Tax Authority’s annual auto industry review, whose first section was released this week.
About 290,000 passenger cars were registered for road use in 2025, an all-time high and 8.4% more than in 2024. Imports, meanwhile, fell sharply.
The explanation lies in December 2024. With a tax hike set to take effect that January, importers raced to bring in as many cars as they could before the deadline. The rush was so large that one month accounted for roughly a third of the imports across 2024 and 2025 combined. Dealers then spent 2025 selling off that stockpile. In January 2025 alone, more than 50,000 passenger cars were registered.
Total imports for 2025 came to about 250,000 vehicles, down 25% from the year before. Passenger cars made up 240,200 of them, a drop of 26.3%. The value of all imported vehicles fell 20.9%, to NIS 23.6 billion. That was partly because fewer cars came in and partly because prices fell, helped by a wave of inexpensive Chinese electric cars. China supplied 96% of the plug-in hybrids and 88% of the electric cars imported last year.
What’s driving Israel’s roads is changing fast, even as the tax breaks disappear. The state scrapped the benefit for regular hybrids in 2022 and for plug-in hybrids in 2024. Purchase tax on electric cars has climbed steadily, reaching 45% in 2025.
Israelis kept buying anyway. Hybrids, plug-ins and electric cars made up about 60% of new passenger cars registered in 2025. Regular hybrids led with 28.4%, followed by electric cars at 20% and plug-in hybrids at 11.9%.
According to the Tax Authority, the shift is expected to continue in the coming years, despite higher taxes and shrinking benefits.
