Chinese electric vehicles, which have rapidly gained a substantial share of Israel’s new car market, are facing increasing restrictions within the country’s defense sector over security concerns. Chinese-made EVs accounted for 44 percent of new vehicle sales in Israel during the first five months of 2026, surpassing the combined market shares of Japanese and Korean brands. However, military and security agencies have moved to restrict their use amid fears of potential cybersecurity risks.

Israeli defense bodies including the Israel Defense Forces (IDF) and the Shin Bet security service have removed Chinese-manufactured vehicles from their fleets. Additionally, major defense contractors such as Elbit Systems and Israel Aerospace Industries have barred these vehicles from employee leasing programs. The IDF has gone so far as to prohibit personnel—both career soldiers and reservists—from parking privately owned Chinese vehicles near certain military bases. These measures stem from concerns that Chinese-made cars could potentially collect sensitive data and transmit it to the Chinese military.

The Governmental Vehicle Administration, responsible for procuring cars for government ministries and agencies, has postponed a tender process widely expected to involve Chinese electric vehicles. While officials cite a need to reexamine pricing, the dominance of Chinese EVs within relevant price segments is believed to have influenced the delay. Although there is growing interest among government and defense employees in transitioning to electric and plug-in hybrid vehicles, options under 200,000 shekels (approximately $68,000) are limited. Available EVs at this price range are largely Chinese-made, and leasing companies receive only modest discounts from importers.

European electric vehicle manufacturers offer various models but maintain a minimal presence in Israel’s market. Brands such as Skoda and Renault have not actively marketed their EVs in Israel, partially due to their commitment to meeting Europe's stringent CO₂ emissions standards (CAFE regulations). European firms reportedly prioritize their home markets and avoid exposing older gasoline models to penalties by exporting them to Israel, where these vehicles typically do not face the same restrictions.

The restrictions on Chinese EVs in Israel extend beyond the defense sector and may soon encompass other sensitive government-affiliated entities, including infrastructure companies like Israel Electric Corporation, Mekorot (the national water company), and Israel Railways. These organizations handle critical data, prompting similar concerns regarding cybersecurity risks posed by Chinese vehicles.

The developments in Israel echo recent U.S. actions, where BYD, China’s largest electric vehicle manufacturer, was added to the Department of Defense’s blacklist of firms linked to the Chinese military. This designation prohibits BYD from participating in U.S. government contracts, complicating its ambitions to expand production and sales in the American market. BYD already faces a 100 percent import tariff on Chinese EVs imposed by the Biden administration, further limiting its U.S. growth prospects.

Despite the costs and limitations imposed by these restrictions, Chinese EVs are expected to maintain their market dominance among Israeli private consumers, largely due to their competitive pricing compared to rising prices for Japanese and European brands. For the defense and government sectors, however, the security concerns mean that reliance on gasoline-powered vehicles is likely to continue in the near term.