Despite the cooling of the entire Israeli car market since the beginning of the year, the electric vehicle segment continues to soar. From the beginning of the year until the end of the third week of March, about 13,100 new electric vehicles were delivered in Israel compared to only about 4,400 in the entire first quarter of last year. The quarterly delivery figure in the electric segment constitutes almost half of all electric vehicle deliveries in 2022.
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The industry notes that the deliveries in the first quarter mainly mark “closing gaps” in stocking from last year, which was characterized by supply disruptions and long waiting lists. Most of the electric vehicles, which were delivered in the first quarter of this year, were released from customs at the end of 2022 before the increase in the purchase tax and they were purchased at a dollar/shekel exchange rate much lower than the exchange rate today. This fact allows importers to grant them significant fleet discounts.
The deliveries since the beginning of the year are led by BYD’s ATTO3 model, which delivered about 4,750 vehicles, a share of about 35% of the market. In second place is Geely’s Geometric C with a share of 18.4% of sales and in third place is Hyundai Ioniq 5 with 8.6% of sales.
The plugin is on the rise
The plug-in segment also continues the momentum from last year with over 5,100 sales until this week, an increase of about 15% compared to the entire corresponding quarter last year. The segment was led by Kia Niro with about 64% of the deliveries, followed by MG HS with 12.4% of the market.
The industry estimates that the sales of electric vehicles in the second quarter will be low due to the general slowdown in the economy, but starting from the third quarter a revival is expected again due to the expectation of raising the purchase tax on electric vehicles on January 1, 2024 from the current 20% to 35%.
The industry estimates that there is still a chance that the purchase tax increase at the end of the year will be suspended due to political considerations, however, it is noted that the chance of this is low because the expected revenues from the tax increase are already priced in the biennial budget.
The Israelis were not moved by Tesla’s discounts
The unusual and dramatic discount move, which Tesla carried out at the beginning of January, did not bear fruit for the time being and its sales in Israel are faltering. This is shown by the Ministry of Transport’s initial delivery data. From the beginning of the year until the end of the third week of March, Tesla delivered approximately 914 vehicles in Israel, of which 480 were Tesla Y units, which for the first time overtook the Tesla 3 model. This is a decrease of approximately 37% compared to the entire first quarter of last year and sources at the Port of Ashdod say that as It is known that no more significant shipments of Tesla vehicles are expected to arrive until the end of the quarter.
This is different from the situation in the markets of China, the United States and some European countries, where the course of discounts resulted in the “attack” of customers on Tesla’s vehicles.
The industry says that the Israeli public’s “cold” reaction to the discount operation stems from a number of factors, including the lack of clear information about the launch date of the upgraded Tesla 3, which should be released this year, and the changes expected in it. In addition, the sharp increase in interest rates makes vehicle financing more expensive, and the lack of stable trade-in services makes it difficult for customers to “upgrade” to a Tesla.
Last week, the analysts of “Morgan Stanley” estimated that Tesla will have to carry out another price reduction, at least in some markets, in order to continue to stimulate the momentum and meet the sales goals it has set for itself. According to Morgan Stanley’s analysts, Tesla’s move ignited a “price war” in some markets, which neutralized the move’s effectiveness.
Tesla Model 3 / Photo: Yeh’ach
A new ZEEKR electric sedan is on its way to Europe
The ZEEKR premium brand of the Chinese GEELY Group is expected to enter Europe in the last quarter of this year. This was announced by the parent group when presenting its annual financial statements to investors. The brand recently established a European headquarters and the vehicles intended for marketing are in advanced stages of tests and adaptations for the European market.
The main model intended for marketing in Europe in the first phase is the compact crossover Zikr X (the name may change later) which is intended to compete with electric premium European models such as the Mercedes GLA and the BMW IX1. However, it is likely to offer a more aggressive price/range ratio.
The length of the vehicle is 4.45 m, its wheelbase is 2.75 m long and it will be offered in a version with a single engine with a capacity of 272 hp or two engines with a capacity of 428 hp. The battery in the first version will have a capacity of 66 kW with a range of up to 560 km in the Chinese standard.
The brand is also supposed to enter Israel in 2024 and the company has so far held talks with six car importers in Israel regarding the granting of the franchise. An announcement about the franchisee should be published soon. It should be noted that the brand is supposed to be issued separately in the coming months and its initial private fundraising was led, according to publications abroad, by Mobileye chairman Amnon Shashua.
On the way to Israel: Mazda crossover for eight passengers
The Mazda company continues to steadily climb towards the premium segment and starting from the third quarter, it will also start marketing in Israel the large and luxurious CX-90 crossover. The vehicle will come to us with the same specifications as the American specifications and this week its details were revealed with the start of pre-sales of the model in the United States.
The vehicle comes in a configuration for six to eight passengers, depending on the arrangement of the seats, and it stretches to a length of 5.1 m, rises to a height of 1.73 m and stands on a wheel base with a length of 3.12 m.
In the United States, the vehicle is offered with a six-cylinder turbo gasoline engine with a volume of 3.3 liters, which produces 280 hp in the base version or 340 hp in the performance version. Next to it, a plug-in version is offered, which combines a 2.5-liter gasoline engine with a capacity of 190 hp and an electric motor with a capacity of 175 hp. The battery with a capacity of 17.8 kW should provide an electric range of up to 70 km.
All models have electronically controlled dual drive and an 8-speed gearbox. It is not yet clear which of the drive versions will be marketed in Israel. The price range in the United States ranges from about 40 to 59 thousand. The price in Israel is unknown, but in the United States the model competes with models such as Hyundai “Palisade”, Subaru “Aboltis”, etc. In Israel, the average price is around NIS 350,000.
Mazda CX-90 / Photo: Public Relations
The price of raw materials for batteries is falling
The prices of lithium-carbonate, the main raw material for the production of car batteries, completed their crash in the world markets this week. Prices have stabilized in recent days around 54 thousand dollars per ton compared to a record of over 83 thousand dollars per ton in November 2022.
The sharp change stems from a number of reasons, including a slowdown in sales in the electric vehicle market in China following the cancellation of subsidies at the beginning of the year and due to the recession. At the same time, a significant increase in lithium supply was recorded due to the start of operation of new and large production plants in China, Australia and Chile. According to estimates, the supply of lithium will increase this year alone between 22% and 42%.
A recent assessment by Goldman-Sachs states that the price may even continue to drop to around $34,000 per ton over the next 12 months.
The sharp drop should contribute to a significant drop in the prices of lithium batteries for electric vehicles, which form a significant part of the total cost of electric vehicles.
The rise in lithium prices in 2022 was an “excuse” for many manufacturers around the world, including Tesla, to raise the prices of electric vehicles. However, so far almost no significant manufacturer has lowered prices due to the cheapening of the raw material. This is on the grounds that the batteries, which are used in vehicles manufactured today, still reflect the peak prices of the beginning of the year. However, according to estimates, if the drop is consistent, a certain price drop in battery prices can be expected in the second half of the year.