Major Automotive Global Trends January 2026

Global

An upheaval in the global auto market: China is expected to overtake Japan in total auto sales for 2025

Chinese automakers are expected to overtake Japanese manufacturers in total global auto sales by 2025, according to a new study by Nikkei China. This would be the first time in history that the Chinese auto industry will rank first in the world in annual export volume.

According to preliminary estimates, in 2025, Chinese manufacturers sold about 27 million vehicles worldwide, while Japanese manufacturers sold slightly less than 25 million units. The data includes passenger cars and commercial vehicles, both in the domestic market and in export markets.

About 70% of Chinese automakers' sales are currently concentrated in the Chinese market, with electric, hybrid, and plug-in models accounting for about 60% of private vehicle sales. Giant companies such as BYD and Geely are expected to enter the list of the world's top ten automakers in 2025.

Despite tariff barriers and the trade war, sales of Chinese brands in Europe (including Russia and the UK) are expected to reach about 2.3 million units in 2025, and in Africa, they are expected to grow by about 32%, to about 230,000 units. In Latin America, growth of 33% is expected (to approximately 540,000 units).

In contrast, Japanese automakers, which reached their sales peak in 2018, with nearly 30 million vehicles, are experiencing a decline in market share in key markets such as the US and China. This is due to fierce competition from local Chinese brands and President Trump's tariff policy.

Research estimates: The surge in demand for AI may trigger another shortage crisis in the automotive industry

The global automotive industry supply chain may face new challenges, this time due to the acceleration in demand for the establishment of data centers for AI.

According to new research, a hidden battle is currently developing over resources for the supply chain, such as electricity, chips, and batteries, between the information and computing industry and the automotive industry. The new crisis joins a series of frequent crises that the global automotive industry has experienced in recent years, which led to challenges in production and operations. Among them are the global shortage of chips following the COVID-19 pandemic, the rise in raw material prices following the war in Ukraine, and more.

The trigger for the current crisis is a global acceleration in the construction of AI data centers, which are used primarily to train and develop AI models. A new report from UBS suggests that the data center construction boom is causing a shortage of memory chips and has already led to price increases of more than 100% for some products.

The study warns that these challenges in the relevant supply chains may emerge from the second quarter of this year and that it cannot be ruled out that global automotive production will suffer a significant impact as a result.

According to the study, semiconductors such as "dynamic random access memory" (DRAM) will be particularly affected. Although the memory chips used by automakers and parts suppliers are generally inferior in their manufacturing processes and performance compared to the advanced models required for AI servers, the production of both types depends on the supply of the same resource - silicon wafers, the global supply of which is limited. The study states that the automotive industry has a narrow window of opportunity to strengthen its procurement strategies and ensure a regular supply of chips.

UBS estimates that automakers and suppliers, which are heavily dependent on advanced driver assistance systems (ADAS) and electronic components, face greater risks of supply disruptions.

At the same time, the increase in demand for AI infrastructure is also leading to an increase in demand for battery energy storage to ensure the stable operation of data centers. As a result, the battery energy storage system market is also expanding at an unprecedented pace, changing the strategic layout and resource allocation of global battery giants.

The main requirements for batteries for energy storage applications are safety and low cost, and therefore, the most suitable battery technology for them is LFP, which is also the most sought-after battery technology in the automotive industry today.

The shift in strategic focus towards energy storage systems also stems from the slowdown in the EV market, which may result in a disruption in supply to the automotive industry and pressure to increase battery prices.

The two industries are also expected to compete for the most basic resource, electricity. According to estimates, by 2035, data center electricity consumption will rank fourth in the world, and this will have an impact on grid loads at a time when the world's electricity grids are preparing to meet the rising demand for EV charging.

USA

New research: auto financing in the US shows signs of a bubble

About 30% of vehicle owners in the US have financing debt that is higher than the value of the vehicle they own, according to a new study by research firm Edmonds. According to the study, in the fourth quarter of 2025, about 30% of car owners who replaced their old vehicle with a new one were in a “Negative equity” status. This is the highest level since the beginning of 2021.

The average amount of negative equity reached a peak of $7,214 during that period, and according to the data, in approximately 27% of the sales and purchase transactions, which were characterized by negative equity, the owners had a financing obligation balance of over $10,000 in excess of the vehicle's value.

This situation is mainly due to car purchases made during the Corona period and the shortage of chips. At that time, new vehicle prices were at their peak, and many customers also chose long loan terms to reduce monthly repayments. Now, with the value of the used vehicle having fallen sharply, the loan balance remains high, which leads to the fact that the debt actually exceeds the current value of the vehicle.

The study notes that when vehicle owners trade in their vehicle too early, they typically roll the unpaid balance of their original loan into the new car loan, thus creating a “Debt rollover.” The study finds that the monthly payment of car buyers with negative equity is about $900, significantly higher than the industry average of about $770.

To ease the pressure of short-term repayments, a growing number of customers are opting for 84-month loan plans. The study shows that in nearly 41% of new car transactions involving buyers with negative equity, the loans are for such a period. While such loans reduce monthly expenses, they lengthen the debt cycle and increase the likelihood of returning to a negative equity situation in the next car replacement.

Congressional Republicans Plan to Cut Over $875 Million in Funding for EV Charging Infrastructure

After President Trump and his party eliminated EV subsidies in the US and lowered emissions requirements, they now appear to be targeting charging infrastructure as their next target.

In January, the Senate and House of Representatives released a series of appropriations bills, including a transportation spending bill for fiscal year 2026. The bill also includes a proposal to cut more than $875 million in federal funding for charging infrastructure. This proposal, if passed, would also affect funds that were already allocated and approved for this infrastructure by the previous administration under the NEVI program.

The NEVI program, promoted by the Biden administration, is designed to build a vital charging network along highways across the US and has so far received funding in 50 states.

Environmental groups in the US have revealed that the proposed cuts include about $500 million, which has already been allocated to various states to advance the program. They claim that the new bill will delay the states' efforts to resume the construction of infrastructure, despite a federal court ruling that ordered the Trump administration to resume the allocations that have already been approved.

The US Department of Transportation lifted the budget freeze after the court ruling, but it still limits some states' access to the funds they are entitled to by law by imposing additional planning requirements.

Since the freeze was lifted in August 2025, many states have renewed their efforts to establish charging infrastructure in their territories. 39 states have already published tenders or signed contracts worth $526 million, and as of now, some have already resumed construction of the stations.

Cumulative sales of low-emission vehicles in California surpass 2.5 million; charging infrastructure continues to expand

According to a recent report from the California Energy Commission (CEC), by the end of 2025, more than 2.5 million low-emission vehicles will have been sold in the state. This figure includes all-electric vehicles, fuel cell vehicles (hydrogen), and plug-in hybrid vehicles.

In the fourth quarter of 2025 alone, about 80,000 new low-emission vehicles were sold in California, accounting for 18.9% of all new vehicle sales in the state in that quarter. In contrast, the market share of such vehicles in the US as a whole fell to just 5.8% during that period, down from 10.5% in the third quarter.

The change is largely attributed to the federal government’s decision to eliminate the tax credit for purchasing a new EV at the end of September 2025. However, unlike the rest of the US, California’s low-emission vehicle market continues to perform exceptionally well. As of the end of 2025, 149 low-emission vehicle models were offered in California, a significant increase in supply compared to previous years. The growth is mainly driven by California’s statewide clean transportation transition policies, local incentives, and demand.

In terms of charging infrastructure, California currently has more than 200,000 public charging stations. It is estimated that more than 800,000 home charging stations have already been installed in the state.

Europe

The EU denies plans to impose tariffs on hybrid and PHEVs imported from China, despite “Internal support on the subject”

In early January, leaks were published in the European media, according to which the EU Commission is considering imposing high protective tariffs on Chinese-made hybrid and plug-in vehicles, similar to the tariffs imposed at the end of 2024 on EVs. This comes after a sharp jump in the volume of imports of such vehicles into the EU was recorded last year.

However, in the middle of the month, the EU's trade spokesman denied the reports and clarified that "The Commission is not conducting an investigation into the export of hybrid vehicles from China to the EU." According to World Trade Organization rules, such an investigation is a necessary prerequisite for any step of imposing tariffs, and therefore, the extension of tariffs is not possible without further investigation. According to the trade spokesman, the battery sector has indeed been identified as "Problematic, with a trade pattern that could pose a threat to the EU industry."

Despite the denial, the European media insist that there is broad support within the Commission for the move to impose tariffs on plug-in vehicles. Among other things, it is claimed that the EU's industry commissioner has "Repeatedly" raised the question of why the tariffs, which apply to electric cars, do not also apply to plug-in vehicles. Especially considering that they are produced "Under the same conditions" and that European manufacturers need "The same protection and the same conditions against them."

The debate over plug-in vehicles is gaining momentum as their import volume to Europe jumped by about 155% in 2025, led by brands such as CHERY, MG, and BYD. In contrast, exports of EVs to the EU, which are already subject to high tariffs, grew by only 12% last year. Today, the total number of Chinese vehicles with plug-in and hybrid drives in the EU is not much higher than that of full EVs.

It should be noted that in mid-January, after lengthy negotiations, a compromise agreement was reached between the Chinese government and the EU, which is expected to lead to the abolition of tariffs on EVs and their replacement with a mechanism for "Setting minimum prices" for EVs exported to the EU (see separate new item).

The European Commission is considering eliminating tariffs on fully EVs imported from China and replacing them with a "Minimum price" mechanism.

In mid-January, a framework agreement was signed between the European Commission and the Chinese government to establish a "Minimum price" mechanism for EVs imported from China. This is to replace the high tariffs imposed by the EU at the end of 2024.

The new mechanism will force Chinese manufacturers to raise prices and lose some of their competitiveness, but the additional profit margin will now go to their pockets and not to the EU coffers, as in the case of tariffs.

The Commission has already published guidelines detailing how Chinese manufacturers must act if they want to export EVs to Europe.

According to the guidelines, they must submit applications to the EU, specifying “Specific minimum prices for each model and configuration.” The guidelines outline two possible ways to set these minimum prices.

The first is based on the CIF prices of each model (a price that includes cost, insurance, and freight) of the relevant exporter, plus the cost of customs duties under the current system. That is, the minimum price must be the same as the current price (which includes customs duties).

The second method is based on the selling price of electric vehicles (BEVs) of the same type produced in the EU, including selling, general, and administrative costs plus a reasonable profit margin for the manufacturer. In other words, the minimum price must be similar to that of comparable European models.

Industry experts predict that the agreement will not lead to a drop in Chinese consumer prices, but Chinese automakers will now be able to keep the difference between the original price and the agreed minimum price, instead of paying it as tariffs to the EU.

China's Ministry of Commerce welcomed the breakthrough, saying that "Both sides have made significant progress in their talks." According to Chinese officials: “The initiative is conducive to the implementation of the China-EU consensus and the proper resolution of the dispute... The breakthrough proves that China and the EU are able and willing to properly resolve their differences within the framework of WTO rules and through dialogue and consultation, and maintain stability in the auto industry and supply chains.”

On the other hand, EU spokesmen maintained a moderate and practical tone, emphasizing that the agreement does not indicate when the minimum prices are expected to enter into force, and at this stage, the document reached only includes guidelines, which will be followed by further steps. According to him, the minimum prices “May” replace the tariff mechanism, but not necessarily.

EV subsidies in Germany return: the federal government will give up to 6,000 euros for EV purchasing based on socio-economic criteria

About two years after the German government abruptly ended subsidies for EVs, causing a sharp decline in demand for this segment of vehicles in the country, the subsidies are officially returning, although now with quite a few conditions and restrictions.

In mid-January, the German federal government announced that it would provide subsidies to low- and middle-income families to purchase new EVs, with the aim of increasing EV sales in the country. Currently, German automakers are facing significantly lower demand for EVs than previously expected.

The new mechanism stipulates that the subsidy will be given only to families with an income of up to €80,000 per year, and its amount will vary depending on the number of children and other variables. The basic subsidy is €3,000; however, it is only for fully electric vehicles (BEV). For plug-in and extended-range models, the basic subsidy amount is €1,500. An additional subsidy of €500 will be granted for each child under the age of 18 in the household and is limited to a ceiling of €1,000 – meaning there is no additional subsidy for the third child or older.

The program will include two income brackets: households with an annual taxable income of up to €60,000 will receive an additional €1,000, while households with an income of up to €45,000 will receive an additional €2,000. This means that in extreme cases, the maximum grant amount can increase to €6,000.

The models eligible for the subsidy will be those that have been licensed in Germany since the beginning of January 2026 and will be eligible for a retroactive subsidy when the application list opens. It should be noted that the models in the first phase also include many Chinese-made car models that are sold in Germany. However, at a later stage, the government will consider giving significant priority to car models manufactured in the EU.

The German government claims that the new subsidy will only apply to new cars and not to used ones because the used electric car market is still not sufficiently developed. A government spokesman said: "With the new subsidy program, we want to do something for the environment, for the European car industry and for households that could not afford an electric car without support... This is a strong push towards electric mobility in Germany and an encouragement for our domestic car industry."

Under the new scheme, only PHEVs and EREVs (Extended Range Electric Vehicles) with emissions of no more than 60 grams of CO2 per kilometer and an electric range of at least 80 kilometers will receive subsidies, and this will only be temporary until July 2027. The German government is considering granting subsidies to such vehicles in the future based on their CO2 emissions in real-world driving conditions rather than the official values ​​stated in the regulations.

Another condition for the subsidy is a minimum ownership period of three years, regardless of the type of drive. In other words, the subsidy is intended for private buyers who intend to use the vehicle in everyday life and do not purchase the vehicle for commercial purposes, as was the case with the previous subsidy scheme. It should be noted that the previous scheme saw a surge in exports of electric cars, which were registered only for a short time in Germany.

The German government has allocated €3 billion from the country's "Climate and Transformation Fund" to the scheme, and the budget should be sufficient for about 800,000 vehicles over the next three to four years. However, the exact scope cannot be predicted due to the varying subsidy amounts depending on the type of vehicle, income, and family circumstances. The program may therefore end earlier than expected.

The German Automotive Industry Association (VDA) estimated in response that the measures would lead to a 17% increase in registrations of EVs in Germany this year, reaching almost one million units.

UK

The UK government is trying to lower EV charging costs

The UK Treasury is aiming to cut the cost of charging EVs amid concerns that the upcoming mileage tax on such vehicles, which will come into effect in the UK in 2028, will lead to a drop in sales in the segment in the immediate term.

According to a decision by the UK government, made in 2025, with the introduction of the new tax in 2028, private EV owners will be charged 3 pence per mile driven. In aggregate, this could be a high additional cost, especially for UK fleets with particularly high mileage.

To mitigate the cost impact of the new tax on sales in the segment, the government is aiming to ensure that the cost of charging at public stations in the UK, which has risen sharply in recent years, is significantly reduced.

It has not yet been decided how this will be done, but government sources say the possibility of reducing the current VAT rate on public charging stations, which currently stands at 20%, is being considered. Home charging stations already benefit from a reduced VAT rate of just 5% in the UK.

In the UK, it is estimated that the new mileage tax will cost EV owners an average of £255, and this amount will be particularly significant for large fleets that own thousands of such vehicles.

The mileage tax, which will come into effect in 2028, is intended to gradually compensate the British treasury for the expected loss of revenue from fuel tax following the massive switch to EVs,  expected over the next five years. Plug-in vehicles will also pay the tax, but at a lower rate of around 1.5 pence per mile.

For comparison, home charging costs around 8 pence per kWh, while the equivalent rate per kWh at a public charging station (AC) is seven times higher, at 54 pence per kWh.

South Korea

Despite the trade war, South Korean exports broke records in 2025

The monetary value of South Korea's automotive exports in 2025 was about $72 billion, a new historical record and the third consecutive year in which automotive exports exceeded the $70 billion mark.

According to a statement from South Korea's Ministry of Trade, Industry and Energy in mid-January, the local automotive industry recorded a "Historic achievement", although it reflects a relatively modest increase of only 1.7% compared to $70.8 billion in 2024.

The growth was achieved despite a challenging export environment, which included the imposition of tariffs by the US, and was mainly due to global demand for Korean vehicles with environmentally friendly propulsion (electric, hydrogen, and hybrid).

Korea’s exports of eco-friendly vehicles rose 11% to $25.8 billion in 2025, with hybrid models jumping 30% to a record $14.8 billion. South Korea also exported used vehicles worth $8.87 billion, a 71% jump. The success is attributed to the growing international recognition of Korean brands and the weakening of the local currency (won).

In addition, in 2025, South Korea’s domestic vehicle production reached 4.1 million units, maintaining stability above the 4 million mark for the third year in a row. New vehicle sales in the domestic market grew 3.3% to 1.68 million units, of which about 813,000 were eco-friendly vehicles. This figure accounts for almost half of total domestic sales.

However, recent data from early 2026 point to short-term volatility. In early January, South Korea’s total automotive export value fell by 2.3% year-on-year, with passenger vehicle exports falling by 24.7%. At the same time, exports to the US and the EU recorded sharp declines (14.7% and 31.7%, respectively), while exports to China rose by 15.4%.

The South Korean government has stressed that, despite global uncertainty, it will work to maintain export momentum and strengthen the country’s competitiveness in the field of future mobility.

China

The Chinese government is preparing to issue a uniform national standard for recycling EV batteries

In January, it was reported that the Chinese government was preparing to issue a new set of mandatory standards for recycling EV batteries. The standards, currently being drafted by China’s Ministry of Industry and Information Technology (MIIT), are part of a new platform that will allow regulators to track the entire life cycle of batteries – from production and sale, through repair, disposal, and dismantling, to recycling.

The standards will apply to all car manufacturers in China from April 1 and are described by government agencies as stricter rules aimed at better controlling the growing volume of end-of-life batteries.

China currently has tens of millions of battery-powered vehicles on the road, with hundreds of thousands of them reaching the end of their life cycle each year. In China, it is estimated that the amount of used batteries from EVs will reach around 1 million tons by 2030, and the financial volume of the battery recycling industry will reach around 69 billion euros per year. However, recycling is still facing increasing difficulties today due to a lack of infrastructure, fire risks, and high dismantling costs.

In 2025, the Chinese government established a committee to standardize battery recycling, and the result is the new standard, which effectively places the responsibility on manufacturers. The standard is designed to support new recycling technologies in the future and to integrate recycling issues from the initial development stage of the battery with battery manufacturers.

Chinese car brands registered strong growth in Europe in 2025, with over 100,000 units sold in December alone

2025 will be remembered as a year in which Chinese car brands achieved significant penetration into the European car market, despite the restrictions. In December 2025, sales of Chinese brands jumped by 127% compared to December 2024, with about 110 thousand units. This is the first time that the 100 thousand unit threshold has been crossed in a single month. The market share of Chinese brands climbed to 9.5% in the same month, more than double the market share of 4.5% recorded in December 2024.

On an annual basis, sales of Chinese brands recorded an increase of 99% in 2025 and stood at about 811 thousand vehicles; their annual market share of total sales also almost doubled and jumped from 3.1% to 6.1%.

The rapid growth of Chinese brands in the past year is closely linked to the acceleration of Europe's transition to electric and "Electrified" vehicles. 2025 was the first year that the EU’s strict carbon emissions targets were enforced, leading to a 30% increase in BEV sales and a 34% increase in PHEV sales year-on-year. Chinese brands enjoyed a significant price advantage and reshaped the competitive landscape in the market.

Canada

Canada has reached a compromise with China, much to Trump's dismay: a quota will be set for the import of Chinese-made EVs at reduced tariffs

In December, the Chinese Ministry of Commerce announced that it had reached an agreement with the Canadian government, under which it would grant China an annual export quota of 49,000 EVs, with the tariff rate on them reduced to 6.1%. This is instead of the maximum tariff of 100%, which was imposed on them in 2024.

In mid-January, the Canadian Prime Minister paid an official visit to China at the invitation of the Chinese government. During the visit, the two sides reached broad agreements on deepening economic and trade cooperation between them, signed a "Roadmap for Economic and Trade Cooperation," and formulated initial joint arrangements to address bilateral economic and trade issues.

The joint document is an important milestone, achieved within the framework of what is defined as a "New type of strategic partnership." This is the first official cooperation signed at such a high level in the history of economic and trade relations between the two countries.

In interviews with media outlets, the Canadian minister stated that "Positive adjustments" will be made in government policy regarding the import of electric vehicles made in China to Canada.

As mentioned, in 2024, Canada imposed an additional tariff of 100% on EVs made in China under American pressure. The move significantly damaged Chinese exports to the country. However, recent changes in the trade map, and especially the frictions with the Trump administration last year, have pushed Canadians to seek alternatives.

According to the agreement, Chinese vehicles included in the quota will be included in the "Most Favored Nation" tariff category, with the quota expected to increase annually at a fixed rate.

China sees this move as a step in the right direction by Canada and an opportunity to expand its activities in the country, including investments in the automotive manufacturing sector. In addition, Canada has agreed to provide relief for imports of Chinese steel and aluminum products, as well as to provide benefits for individual Chinese investments and activities in Canada.

At the same time, China will provide relief in the tariff policy on agricultural, land, and marine products imported from Canada. As expected, the US President expressed strong opposition to the agreement and, in late January, announced that if the Canadian government advances it, he will impose a 100% tariff on all products imported from Canada to the US. It is still unclear how American pressure will affect it.

Japan

Amid Expected Chip Shortage: Japanese Auto Industry Collaborates to Centralize Vital Data

In recent years, the Japanese auto industry has lagged behind China in developing advanced chips, which are essential for advanced EVs. But now, with chip shortages looming, the Japanese government is determined to close the gap.

In January, it was reported that several Japanese automakers, led by Toyota, would collaborate with each other and with Japanese and international chipmakers to develop semiconductors for the auto industry. The stated goal of the move is to strengthen key links in the supply chain and mitigate the impact of geopolitical risks and natural disasters.

About 20 chip suppliers from Japan and Europe are expected to participate in the program, as no Chinese chipmaker has joined so far. The cooperation is expected to cover between 80% and 90% of the semiconductors used by Japanese automakers.

According to the plan, an information system will be established in which chipmakers will present data such as product specifications, production dates, and factory locations, in order to identify components whose supply is uncertain. The system will use Blockchain technology to prevent information leakage to competing automakers.

The Japan Automobile Manufacturers Association (JAMA) will cooperate with the Japan Auto Parts Manufacturers Association to establish a chip data repository, the construction of which is expected to be completed by April this year. The system will be operated through a center based in Tokyo.

The new system is designed to address problems stemming from the auto industry’s “Pyramid structure” of multiple layers of suppliers, which makes it difficult to see the big picture and assess risks. The government believes that if automakers have more information about the sources of chips, they will be able to respond more quickly and find alternatives in the event of disruptions. The system will also be open to non-Japanese automakers, subject to application.

The importance of chips is growing as the industry moves to adopt autonomous driving and artificial intelligence technologies.

Current forecasts estimate that the global automotive semiconductor market will reach $160 billion a year by 2035, an increase of more than 80% compared to 2025.

Israel

The Ministry of Finance published an analysis of state revenue from vehicle taxation in 2024: Last year, new collection records with 54-60 billion NIS

In January, the Chief Economist at the Ministry of Finance published an in-depth review of state revenues for 2024, which includes data on state revenues from taxation on the purchase and use of vehicles.

According to the data, that year an all-time record was broken in collection from vehicle taxation, fees, and fuel, and total revenues amounted to approximately 53.3 billion NIS. The data does not include revenues from the value-of-use tax, which is estimated at approximately 5 billion NIS.

Even without this item, state revenues from vehicle taxation that year amounted to approximately 12% of total tax collections. However, the data includes an exceptional collection of approximately 4 billion NIS, which resulted from the advance release from customs of over 100,000 vehicles at the end of 2024, in anticipation of a tax increase.

As in every year, the main collection item was the fuel excise tax, from which revenues amounted to approximately 23.7 billion NIS that year. The Chief Economist estimated that 2024 was an exceptional year in fuel excise tax collection, but the state's tax revenue data for 2025, published in January 2026, show that collections continued to rise that year as well, totaling more than 25 billion NIS. According to the report, the excise tax on gasoline in Israel was the second highest among all OECD countries in 2024 and 41% higher than the excise tax in all OECD member countries.

The Chief Economist's report emphasizes that there is a need to impose a mileage tax on EVs. According to the report, the transition from gasoline vehicles to EVs reduced excise tax collection on gasoline in 2024 by approximately 0.6 billion NIS, and this revenue "Loss" is expected to grow over the next ten years and total 6.2 billion NIS per year by the middle of the next decade. The economist estimates that revenue from a mileage tax, if imposed, would reach approximately 3.5 billion NIS per year by the end of the decade, about half of that "Revenue loss."

The second-highest revenue item that year was the purchase tax. According to Treasury data, in 2024, the purchase tax on the purchase of vehicles and spare parts contributed approximately 15.7 billion NIS to state revenues. There was also a jump in the vehicle customs duty, which is imposed on vehicles from countries that have not signed a trade agreement with Israel, mainly China.

Revenue from this tax amounted to approximately 1 billion NIS that year. Revenue from fees, the main part of which is annual license fees, brought in 5.3 billion NIS to the treasury that year, while VAT on fuel excise, purchase tax, and customs duties amounted to 6.9 billion NIS.