Israel Vehicle Market in 2026 struggles. Q1 sales dropped by 2.8%, with Jaecoo and Chery reporting major gains amidst widespread losses. EVs surged 26.1%, seeing renewed momentum driven by intense brand competition.
Forecasts for 2026 suggest that Israel’s economy will grow strongly, around 3.8% according to the Bank of Israel and about 4.4% per the International Monetary Fund, outpacing most developed economies despite ongoing regional conflict.
This resilience is supported by low unemployment, controlled inflation, a relatively low debt-to-GDP ratio, and a robust high-tech sector attracting major foreign investment. Financial markets have also performed well, with gains in equities and the currency, though risks remain from prolonged conflict, labor shortages due to military mobilization, and weakened tourism and consumer activity.
Automotive Industry Trend and Outlook
The Israeli vehicle market opened 2026 downbeat, reporting losses of 10.7% in January. Overall, the Q1 tally reached 95,188 units, down by 2.8% year-on-year.
Brand-wise, the leader was Toyota -up 1 spot- with a share of 10.7% (-13%), in front of Hyundai -down 1 spot- with 10.4% (-22.8%) and Chery -up 2 spots- with 9.9% (+82%), followed by Kia -down 1 spot- in 4th (+3.6%), and Jaecoo -up 2 spots- in 5th (+111.9%).
Looking at models, the Jaecoo J7 became the best seller growing 1 spot and 17.7% with a 5% share. The Hyundai Kona followed in 2nd losing 8.8% and its leadership spot to a share of 4.6%.
EV Market Trend and Outlook
Israel EV sector is at a crosspoint in 2026, with future outlook hinging on the trade-off between more affordable chinese imports, intense brand competition and policy tightening. In Q1, the segment grew by 0.9% to a share of 13.8%.
Jaecoo surged into 1st securing a share of 23.6% while BYD ranked 2nd, losing 1 spot with a 20.1% share. Tesla ranked 3rd with 10.6%.
Medium-Term Market Trend
From 2014 to 2016, Israel’s vehicle market grew steadily from 239,942 to 287,040 units (+19.6%), a peak only surpassed in 2021. Between 2017 and 2019, sales declined for four consecutive years, falling to 254,795 by 2019.
The pandemic significantly impacted the market in 2020, reducing registrations to 214,587 (-15.4%). A strong recovery followed in 2021, reaching 289,300 (+34.8%), after which the market stabilized around 270,000 units, ending 2024 at 271,709 (+0.6%), indicating stagnation. This reflects pressures from global semiconductor shortages, rising costs, and the gradual shift toward EVs, which remain relatively expensive for many consumers.
Israel’s EV market, slow before 2021, surged post-COVID, growing 1,057% in 2021 and maintaining strong double-digit expansion through 2024 (+27.9%). It is driven by aggressive Chinese competition, supportive taxation, expanding charging infrastructure, and tech-savvy adoption, though affordability and leasing constraints remain barriers. EV sales reached 51,626 in 2025, while total vehicle sales were 271,729 in 2024 and rose to 293,591 in 2025.
Tables with sales figures
In the tables below we report sales for 10 Brands and top 10 Manufacturers Groups.
