Tesla mulls entering Israel's car market

Elon Musk  photo: Stephen Lam, Reuters

The US electric car manufacturer has been checking out Israel's car market and could begin operations from next year.

US electric car manufacturer Tesla is checking out Israel's car market and considering beginning operations in the country from next year.

Sources in Israel's vehicle market have told "Globes" that representatives from Tesla's European Division have been in Israel to examine the local market including the electric car battery charging infrastructure and its technical suitability for Tesla's 'superchargers.' Also being considered are the various logistics needed for importing the cars into Israel in terms of a management and operations network. Tesla has declined to confirm this report.

In recent years, there have been many direct and indirect attempts to import Tesla cars to Israel but representatives contacting the company were met with a refusal. The response was always that Tesla's business model is not to work through independent agencies, dealers and representatives to set up its own operations in overseas countries.

Tesla controlling shareholder Elon Musk has visited Israel several times in the past two years in what were described as 'family visits.' During those visits, he refused to answer business questions and denied any contacts with Israeli auto-tech and automated driving technology companies.

Tesla's interest in entering the Israeli market comes against the backdrop of a major rise in the production of electric cars in the US in general and in particular Tesla's opening of a factory in China, which will sharply increase the company's production potential.

Tesla recently announced that it was entering the Serbian and Croatian markets and that it would subsequently move into other Eastern European countries. These are markets that are smaller and less developed in terms of cars than Israel's market.

Also, market sources believe that Tesla's R&D department has ongoing collaborations with Israeli auto-tech startups.

Until recently, it would not have been possible for Tesla to import its own cars into Israel, with local regulations allowing only Israeli owned companies to import cars. However, new regulations now allow companies owned by a foreign corporation to import cars.

On the other hand, changes in Israel's green car tax, which came into effect in January 2019, caps tax savings at NIS 60,000 per car. This will make Tesla cars like the S-model, which costs €70,000 before tax, significantly more expensive. Tesla's less expensive models, which cost around €40,000 abroad, will not be affected by the tax changes.

If Tesla does decide to enter the Israeli car market, it will be to make substantial investments in setting up logistics warehouses, service garages and a car showroom in a prime location.

Published by Globes, Israel business news - en.globes.co.il - on October 17, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Elon Musk  photo: Stephen Lam, Reuters
Elon Musk photo: Stephen Lam, Reuters
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