New decree: approving licensing fees for electric cars in thousands of shekels

An important decree affecting 110,000 electric car owners, many of whom are residents of the periphery, was approved today in the Knesset: the Finance Committee approved rules that equate the licensing fees for electric cars with the licensing fees for non-electric cars .

The regulations were approved after a stormy debate, following a proposal that had already been rejected once, and will result in an average increase of NIS 2,300 in license fees per car, with the aim of generating approximately NIS 230 million annually for the state coffers. However, committee chairman Moshe Gafni (United Torah Judaism) agreed to ease the burden on drivers and determined that the change will not take effect until January 2025 instead of next July.

The implication: Any electric car driver who passed the test before December 31 can pay the current rate of NIS 546. The rest pay a fee like petrol and diesel cars, based on the price group and the age of the car, regardless of the drive type.

The Ministry of Finance, supported by Transport Minister Miri Regev, stated in the explanatory memorandum to the regulations that the impact of electric cars on infrastructure, traffic congestion and maintenance costs in the licensing system is no different from that of non-electric cars. It was also noted that reducing air pollution is evident because they do not pay taxes on fuel.

MK Yonatan Azoulay (Shas): “It cannot be that on the one hand they tell us that they encourage, subsidize, tax greenery, and on the other hand they do the opposite. Do you want to introduce a fuel tax? When? And how does that work? in line with environmental quality and health? Will it help reduce traffic jams?

MK Naor Shiri (Yesh Atid): “The state does not want to encourage electric cars, it costs money, it generates revenue.”

MK Imtan Hatib Yassin (Ra’am): “Nowadays, electric cars are also bought by the middle class, by those who want to save on fuel.”

Itai Rabed, CEO of Tesla Israel, said in the discussion that “Tesla, the most expensive in the world, is sold in Israel. In the world it sells for 40,000 euros, in Israel it starts at NIS 220,000. What the state says Israel is doing, due to the purchase tax that has increased to 35%, the percentage of the car delivery tax is decreasing. Europe is moving forward, with benefits for buyers, manufacturers and importers, we are moving in the opposite direction costing NIS 300,000 if the country equalizes the purchase tax between electric and gasoline cars. We distance electric cars from Israelis.

Eitan Parnas, CEO of the Association of Green Energy Companies in Israel, said that “after so many years of green taxation, the tax authorities are destroying the issue of electric cars. They send a signal to the public: don’t buy electric cars. Let’s explain it all, you bring in the benefit, then you bring in the travel tax. You define electric cars only for people with their own charger. You don’t have a dialogue, you run to take money, remove the tax on 3.3 million polluting cars.”

In the Treasury, data was presented in a discussion showing that drivers currently pay approximately NIS 5.3 billion per year in licensing fees. It was also claimed that increasing taxes is not expected to impact electric vehicle penetration, and it was shown that the gradual reduction of electric vehicle benefits does not harm market access even in Israel, and that the benefits offered in Israel are relatively high from an international perspective.

Chairman of the committee, Knesset member Moshe Gafni, said: “We have had a discussion, several questions have been asked, we will hear several answers and I intend to put the proposal to a vote. I agreed to this after it was explained to me that without this funding there is no budget for public transport reform. If there is no majority in favor, it won’t happen.”