Electric or petrol: what does ownership really cost in Israel?

עברית

EV purchase tax — rising, and not a perk: unlike most countries, Israel has no purchase incentive for electric cars — the opposite. Purchase tax on electric passenger cars (BEV) rose to 48% in 2026 (from 45% in 2025; before 2025 it was 35%), and the tax-exempt slice of the car's price was cut to NIS 22,000 (from NIS 30,000 in 2025). The Treasury even tried to raise it to 52%, but the Knesset Finance Committee stopped it at 48%. This is a headwind that pushes up BEV sticker prices — we show it as context only and never deduct it from the total cost (deducting it would flatter the electric car unfairly). The shovi shimush usage value (a tax benefit) for a company EV stands at about NIS 1,350 a month (2025) — the temporary provision has been extended unchanged until the end of 2028. Sources: Times of Israel / Globes / Israel Tax Authority gov.il, as of 1 July 2026. Confirm the tax rate and the threshold for each model before you buy.

Depreciation is the honest variable that decides it: on the energy side the electric car wins clearly — home charging at the regular household rate, and certainly at the off-peak rate (the TAOZ time-of-use tariff, at night), is far cheaper per km than fuel. But the 5-year total cost is not a guaranteed win for the electric car, for two honest reasons: (1) purchase tax is rising — 35% → 45% (2025) → 48% (2026), with the tax-exempt slice cut from NIS 30,000 to 22,000 — which pushes up sticker prices; and (2) steep depreciation in the second-hand market: used-BEV values in Israel are squeezed by the Chinese brands' price war and by the rising purchase tax, which drags down the replacement-price anchor. By contrast, petrol cars and hybrids from Toyota and Kia hold their value well. That's why we set the BEV depreciation curve deliberately low — that is today's market reality. Maintenance and insurance are based on drivetrain-type defaults (an estimate, not a cited Israeli figure) — which actually favour the electric car on maintenance, and even so the honest conclusion often leans HEV. Sources: Times of Israel / Globes / Israel Tax Authority, as of 1 July 2026.