Israel's electric vehicle market has declined below the global average of 14%, with EVs accounting for 11% of new car sales in 2026.This marks a sharp reversal from previous years of rapid growth, where EV sales peaked at 25% in 2024.

The decline is attributed to reduced tax incentives, policy changes, and market distortions such as 'zero-kilometer' vehicles inflating sales figures.

While Europe and Asia continue to see rising EV adoption—Norway leading at 98% and China at 14%—Israel's market share has dropped to 11%, despite lower electricity costs and renewable energy potential.Analysts note that government policy reductions, including narrowed tax benefits for company cars, have contributed to the slowdown.However, Israel remains well-positioned for EV growth due to short driving distances and competitive manufacturing.

The report highlights global trends, with countries like Vietnam (33%) and Thailand (28%) showing strong EV adoption, while others like Japan (2%) lag behind.